The year 2020 has yielded some very surprising developments, to say the very least. In terms of asset performance year-to-date, gold is performing more than adequately. In fact, it is the second-highest performing asset so far, well ahead of stock markets and oil.
Asset Performance Year-to-Date
Given all of the issues and developments occurring in the first quarter of 2020, it is not abnormal to see most assets lose value. All major markets have been hit quite hard due to the coronavirus pandemic. Investor confidence in stocks and foreign currencies has decreased significantly, with no real improvement in sight for the foreseeable future.
Despite the odds, the best performing asset year-to-date is the US 10-year Treasury. Very surprising, considering that this asset class has come under a lot of scrutiny in recent months. Even so, the 10-year Treasury is still up 13.4% year-to-date, albeit it remains to be seen how long that will be the case.
Gold comes in second place, with an overall performance of +8.5%. This is well ahead of the DXY Dollar Index and German Bund.
In total, there are just four assets with a positive performance over the past year, which isn’t exactly promising. It is an unfortunate side effect of the coronavirus crisis, albeit one that was also somewhat expected given the coronavirus situation.
Contrary to some expectations, Bitcoin has not performed all that well. Its value is down by 4.3% compared to the same period last year, Most people would expect the world’s leading cryptocurrency to rise in value during times of financial hardship. This year, that doesn’t appear to be the case.
Things could be far worse for gold and Bitcoin, however. Other assets, including all stock markets, lost at least 7.7% in value year-to-date. In some cases, such as the CRB Commodities Index, the loss is as high as 30.26%.
All of this pales in comparison to Brent Crude Oil, which is still bleeding value. It has already lost over 50% in value so far, with its price dropping incredibly low in recent days. Oil futures have even dropped in the negative range, further indicating that the financial hardship is far from over.
The Gold Price Momentum Remains Complex
The big question is which assets will come out on top in the months to come. Anything related to stock markets and foreign currencies seems rather unlikely to bounce back. Anything can happen in the financial industry, but for now, expecting more of the same seems plausible.
In terms of gold and other precious metals, the future remains uncertain. Silver isn’t even on the list, indicating that it performs neither bad nor good.
Gold is still suffering from a notable decrease in production as most mines are either shut down or have lowered their production significantly. At the same time, the demand for gold is not increasing, thus it is difficult to predict what happens next.
Based on the current market conditions, the gold price appears to be falling slightly. Maintaining the price above $1,700 has not been successful, and a drop to the $1,650 range seems rather likely in the short term. Overall, the gold price uptrend has not been broken. A new all-time high later in 2020 still seems very likely under the current circumstances.