U.S. Economy Charges Ahead, Bad News for Gold (At Least in the Short Run)

July 18 2018

213,000 news jobs were added in June. Wages rose by 2.7 percent compared to a year earlier. However, the unemployment rate rose to 4.0 percent, up from 3.8% a month earlier. Yet, there is no shortage of not just good, but amazing news for the U.S. economy.

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Edin Mujagić

Gold Falls Below Price Floor

July 6 2018

To say that gold is getting dealt heavy blows would be quite an understatement. Over the past weeks, the world’s leading precious metal saw approximately $100 dollars shaved off its price. Compared to a year earlier, gold prices are now roughly $50 dollar lower. And a comparison with its peak of about $1,900 dollar would lead to an even more dazzling conclusion.

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Edin Mujagić

Dow Jones Index Closed Eighth Day in a Row with a Loss: Here Is What It Means

June 26 2018

Reality is finally dawning on investors: we are on the verge of a global trade war. As a consequence, last week, the Dow Jones Index closed on Thursday for the eighth day in a row with a loss. A rather rare event, since such persistent losing streaks do not occur often. Both in 2008 (during the

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Olav Dirkmaat

On Gold as Inflation Hedge

June 20 2018

Is gold truly a solid hedge against inflation? Not quite, at least according to a study by Credit Suisse and the London School of Economics (LSE). They looked at the performance of gold and stocks from 1900 to 2012 and concluded that gold prices are too volatile and that stocks enjoy better returns. Whereas an investor exclusively invested in gold earned an annual return of 1.1 percent over the same period and suffered several heart attacks in the meantime because of the high volatility, a stock investor would have enjoyed a remarkably higher return at an average annual (real) return of 5.4%. Moreover, gold does not earn a yield, contrary to stocks.

Another conclusion from the same study is that stocks are not a sound inflation hedge. Gold, of course, is the quintessential inflation

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Edin Mujagić

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