Gold’s price tumbled Wednesday and there may be more to come. The decline, which saw gold’s spot price slide 2.2 per cent to US$1,866.60 an ounce, was part of a broad retreat across markets. The S&P 500 index of big U.S. stocks declined by 2.4 per cent while, in Toronto, the S&P/TSX Composite slipped 2 per cent.
Investors are growing worried about the lack of progress on more fiscal stimulus from Washington as well as the growing threat of a new wave of coronavirus cases in many developed economies. All those factors are likely to weigh on global growth in the months ahead.
Gold’s fall is likely to renew doubts about whether it is the best haven for anxious investors, given the current state of the economy.
To its credit, bullion held its value during the worst of the pandemic sell-off in March. Over the following months, though, it has been left in the dust by alternatives, such as bitcoin and tech stocks.
Since January, gold has gained 23 per cent. By comparison, bitcoin has surged more than 46 per cent.