VanEck: Goud presteert bovenmatig tijdens sell-off

April 16, 2020

Hieronder volgt een commentaar in het Engels van Joe Foster, portfoliomanager en strateeg bij VanEck, op de goudprijs. Lees in de meegestuurde Monthly Gold Commentary zijn volledige commentaar.

Gold has outperformed most asset classes so far in this latest market sell-off. It ended March with a slight $8.51 (0.5%) loss to close at $1,577.18 per ounce. Gold rose early in the month to a fresh seven-year high of $1,703 on 9 March. However, similarly to the crash in 2008, funds have had difficulty selling their losers and have become desperate for cash. As the market panic gained momentum, gold was sold as a source of liquidity for margin calls, redemptions and risk-off positioning. The monthly low of $1,451 came on 16 March, and was possibly the shortest $250 selloff in gold’s history. Gold leapt higher following the U.S. Federal Reserve’s (Fed’s) second emergency rate cut, then higher again on 23 March after the Fed announced unprecedented programs to expand its securities purchases and extend credit to corporations, small businesses, commercial mortgages, states, municipalities and consumers. The Fed also signaled unlimited purchases of treasuries and mortgage-backed securities (quantitative easing or “QE”). However, the stock market continued to tank; investors know that the Fed can’t buy cruise ship tickets, fill baseball stadiums, or go to a restaurant, which is what the economy really needs. Much of the Fed’s efforts are aimed at injecting massive amounts of liquidity into credit markets that had seized up. Incredibly, cracks have even emerged in the market for U.S. Treasuries, as they sold off with the stock market on some days. Gold has performed as a hedge against both the turbulence and the inflation that might eventually come from all of this intervention. Gold maintained its gains leading up to the 26 March announcement of a $2.2 trillion stimulus package from the U.S. government that makes the existing trillion-dollar annual deficit seem trite.

Gold stocks have roughly tracked the broader stock market through the crash to date, as the NYSE Arca Gold Miners Index (GDMNTR)1 fell 10.4% in March. The MVIS Global Junior Gold Miners Index (MVGDXJTR)2 declined 21.3%, underperforming the GDMNTR due to its smaller, less liquid constituents. This is normal gold equity performance in a crash and the drawdowns so far are less than that seen in 2008. We expect gold stocks to rise to reflect the underlying strength in the gold price once the panic has subsided and companies are able to return to full production.