by Adam Hamilton
Gold has spent much of the past couple months consolidating, vexing traders and bleeding away most of early 2016’s enthusiasm that catapulted the yellow metal higher. But this sideways grind has actually been a very impressive show of strength. Gold managed to hold its massive gains despite an incredible stock-market rally, which can really sap gold investment demand. This portends another major gold upleg.
Gold’s performance this year has been nothing short of remarkable. This unique portfolio-diversifying asset that tends to move counter to stock markets was universally loathed as recently as December. It actually fell to a 6.1-year secular low the day after the Fed’s first rate hike in 9.5 years. The vast majority of investors scoffed at gold, believing it was doomed to spiral lower indefinitely with the Fed tightening.