After years of lagging the stock market, gold, silver, and platinum prices per ounce have all increased in 2016. Silver is leading the charge, up 38% since December 2015, followed by gold (up 24%) and then platinum (up 15%). Precious metals can be controversial in the eyes of investors as the proponents of the shiny substances argue that ownership provides the holder with a hedge against currency fluctuations, inflation, and volatility in the markets. Investors that typically oppose holding the metals argue that the substances hold no actual value despite having a physical presence and can be impractical to actually hold in order to hedge one’s portfolio. With the invention of ETFs, investors now have the ability to get exposure to metals without having to physically hold them. So far this year, “GLD,” one of the largest ETFs tracking the price of gold, has had a massive increase in trading volume as it appears many investors believe ownership can hedge market volatility. Ballentine Partners has not been a believer of this thesis in the past and is not recommending an allocation now. This short term trade is already beginning to unwind. We continue to believe that our clients are better served by remaining committed to longer term growth strategies rather than attempting to control short term market fluctuations.
The discussions and opinions in this market summary are for general information only, and are not intended to provide investment advice. While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its appropriateness for any given situation. Past performance of the indices shown is not necessarily indicative of future results.