Base Metals


This is no April Fools’ Day joke. Gold just had its best quarter since 1986.

The first quarter of 2016 is now over, and it’s fair to say that for gold it was a good one. The yellow metal rose an impressive 16.5 percent during the period, achieving its biggest quarterly gain since 1986. 
Major gold stocks have also achieved notable gains so far in 2016. According to The Wall Street Journal, Newmont Mining’s (NYSE:NEM) share price was up 48 percent for the year as of Friday; meanwhile, Randgold Resources (LSE:RRS,NASDAQ:GOLD) has gained 54 percent and Barrick Gold (TSX:ABX,NYSE:ABX) has risen a whopping 72 percent.
A slew of factors have driven gold up these past few months. The Journal notes that the precious metal saw a good boost in the first six weeks of 2016, “when stocks, junk bonds and oil prices slumped, began to recover and then tumbled again.” However, even though a variety of stock indices gained at the end of Q1, overall concern about world markets has kept the gold price up.

“People are reluctant to take profits on their gold positions because of all the insecurity the world is facing,” George Gero, managing director at RBC Wealth Management, explained to the publication. As of 1:45 p.m. EST on Friday, gold was changing hands at $1,220.90 per ounce.
For its part, silver rose just under 10 percent during Q1, and was trading at $15 per ounce as of 2:18 p.m. EST on Friday. Check out our more detailed overview of silver’s Q1 price performance in this article.
On the base metals side, the copper price ended the first quarter up a more modest 4.63 percent. And unfortunately, a recent price dip has some market watchers worried that even that small increase may not be sustainable.
“Investors have been attracted to commodities as one of the best performing assets so far in 2016. However, in the absence of any concerted fundamental improvements, those returns are unlikely to be repeated in the second quarter, making commodities vulnerable to a wave of investor liquidation,” Barclays (LSE:BARC) analyst Kevin Norrish warned earlier this week.

Finally, oil prices fell Friday on news that output from OPEC countries rose by 64,000 barrels a day in March, hitting 33.09 million barrels a day. Notably, production from Iraq and Iran was the highest in four years, states CBC News.
As a result, West Texas Intermediate was down $1.55, or 4 percent, at $36.78 per barrel, midway through Friday. Meanwhile, Brent crude was down $1.56 at $38.78.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
Related reading: 
Weekly Round-Up: Gold Price Dampened by Fed Worries
Weekly Round-Up: Silver Outperforming Gold
Weekly Round-Up: 13-month High for Gold Price
Weekly Round-Up: Gold Enters Bull Market Territory
Weekly Round-Up: Buy Gold Now, Says Deutsche Bank


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