The spot price of gold was up 1.5% as trading winded to a close on January 3. This occurred in the wake of the assassination of a top Iranian general by United States forces in Baghdad, Iraq.
The top U.S. indices suffered retreats on the same day as investors flocked to safe havens for fear of escalating tensions in the region. Bitcoin and other cryptocurrencies also enjoyed a run up on Friday.
Despite this upward move for the yellow metal, many of the top gold equities failed to gain momentum on the same day. This was likely due to downward pressure in equity markets in response to the same event. Barrick Gold (TSX:ABX)(NYSE:GOLD) was only up 0.2% in late afternoon trading. While Yamana Gold (TSX:YRI)(NYSE:AUY) was down 1.1% at the time of this writing.
I liked gold entering 2020, especially on the heels of record highs for the stock market. That momentum for equities failed to completely derail gold’s phenomenal year in 2019.
Central banks in the developed world have committed to low rates for the foreseeable future, and there are still storm clouds on the horizon.
The U.S.-China trade deal is very limited and will not put a stop to global trade battles. Tensions stirring in the Middle East will only heighten a worsening geopolitical landscape.
These are just some of the reasons I like gold to start off the year.
Investors should consider buying low on some of the top gold equities that are still available.