Gold Outperforms Other Investments in 2020

Gold outperformed all other major investments during the first half of the year as the global coronavirus pandemic triggered a flight to quality assets. 

Gold posted a gain of nearly 17 percent, ending the first half at $1,770 an ounce on the London PM price fix, its highest level since 2012.

Beyond the economic turmoil resulting from the coronavirus, low interest rates across the globe also increased the appeal of the precious metal. 

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By comparison, the Nasdaq Composite Index, which led the stock market’s rebound from its March low, ended the first half with a gain of 10.4 percent. The Standard and Poor’s 500 Index was down 5.2 percent for the first six months of the year. 

As the Federal Reserve pushed short-term interest rates near zero, bond prices, which move inversely to yield, jumped. U.S. Treasuries posted a gain of 8.7 percent. Corporate bonds rose by 4.8 percent.

Broad overseas stock indexes posted losses for the first half, with the Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) Index dipping 12.8 percent and the MSCI Emerging Markets Index losing 11.1 percent.

Commodities, many of which are highly sensitive to economic cycles, suffered mightily. The Bloomberg Commodity Total Return Index dropped 20.8 percent, dragged down by oil which suffered a stunning decline of 58.6 percent. 

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