After Brexit, gold seems to capture the center-stage among investors at a time when global economic uncertainty is engulfing equities and demand-supply disruption is seen in crude oil.
The Brexit aftermath saw international gold prices spurting by US$ 100 per t oz last Friday, which put the safe heaven on the top in terms of offering return on investment among other asset classes such as equities and crude oil in the current month. Though the precious metal has surged 23% so far in 2016, it is crude oil that has outpaced gold and equities with an impressive 29% return.
After Brexit, gold seems to capture the center-stage among investors at a time when global economic uncertainty is engulfing equities and demand-supply disruption is seen in crude oil.
For the current month, gold prices have soared by 8% to US$ 1,311 per t oz as on June 28; while the WTI crude oil at Nymex has cooled down 3% and India’s stock market barometer Sensex has offered -0.5% return in June.
For CY16, though crude oil leads from the front so far the road ahead does not seem conducive as it is not able to breach the US$ 55 mark for a while now. WTI Crude oil remained under pressure, as markets seem to be factoring in gradual restoration of Canadian output rather than the long term repercussions of Brexit, which cannot be ascertained at the current juncture.
According to Amar Ambani, Head of Research, IIFL Wealth, “Post Brexit, the prevalent environment is simply conducive for a strong appetite of a safe haven asset and gold seems to be emerging as a prime beneficiary.”
Leading stock indices failed to match the rise seen in crude oil and gold
The current calendar year started on a subdued note for equities fueled by Chinese stock markets collapsing dramatically, which was soon followed by global crude oil prices plunging to a 13-year low. However, crude oil staged a remarkable resurgence but equities are yet to see a full-fledged rally. Following is the snapshot of how global stock indices have fared in the current calender year so far:
After Brexit, gold seems to capture the center-stage among investors at a time when global economic uncertainty is engulfing equities and demand-supply disruption is seen in crude oil.
For the current month, gold prices have soared by 8% to US$ 1,311 per t oz as on June 28; while the WTI crude oil at Nymex has cooled down 3% and India’s stock market barometer Sensex has offered -0.5% return in June.
For CY16, though crude oil leads from the front so far the road ahead does not seem conducive as it is not able to breach the US$ 55 mark for a while now. WTI Crude oil remained under pressure, as markets seem to be factoring in gradual restoration of Canadian output rather than the long term repercussions of Brexit, which cannot be ascertained at the current juncture.
According to Amar Ambani, Head of Research, IIFL Wealth, “Post Brexit, the prevalent environment is simply conducive for a strong appetite of a safe haven asset and gold seems to be emerging as a prime beneficiary.”
Leading stock indices failed to match the rise seen in crude oil and gold
The current calendar year started on a subdued note for equities fueled by Chinese stock markets collapsing dramatically, which was soon followed by global crude oil prices plunging to a 13-year low. However, crude oil staged a remarkable resurgence but equities are yet to see a full-fledged rally. Following is the snapshot of how global stock indices have fared in the current calender year so far:
Global stock indices in 2016 so far
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Index
|
Country
|
Return (%)
|
Bovespa
|
Brazil
|
16
|
Thai SET
|
Thailand
|
11
|
Jakarta Comp
|
Indonesia
|
6
|
MICEX index
|
Russia
|
6
|
Nifty
|
Ind
|
2
|
Taiex
|
Taiwan
|
2
|
FTSE/JSE Africa
|
SA
|
1.5
|
Sensex
|
Ind
|
1.5
|
Nasdaq
|
US
|
-0.1
|
DJIA
|
US
|
-0.5
|
S&P 500
|
US
|
-0.8
|
FTSE 100
|
UK
|
-1.1
|
Kospi
|
Korea
|
-1.2
|
S&P ASX 200
|
Australia
|
-3.6
|
Straits Times
|
Singapore
|
-4.3
|
Hang Seng
|
HK
|
-7.9
|
CAC
|
France
|
-11.2
|
DAX
|
Germany
|
-11.2
|
Shanghai Comp
|
China
|
-17.7
|
Nikkei 225
|
Japan
|
-19.4
|
Last update June 28, 2016
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