Gold’s Highest Quarterly Close In History

Our ITV report examines gold’s banner performance during the second quarter of 2020, along with year-to-date performance. We’ll also look at the Fed’s impact on gold, the gold/silver ratio, and the outlook for the second half of the year. It was a history-making quarter, with numerous catalysts still on tap, so let’s dive in.

Second Quarter Performance

Gold’s selloff in March led to a strong rebound through mid-April, the price jumping $268 within three weeks. It then traded mostly range-bound until the last week of the quarter, when it spiked again to end Q2 at $1,783.58, up 12.6%.

Here’s how precious metals performed in the second quarter, along with other major asset classes. It was a banner quarter. Gold ended Q2:

  • At the highest quarterly closing price in history.
  • At the second highest monthly close ever.
  • With the strongest quarterly performance since Q1-2016.
  • And now has risen three consecutive months and six consecutive quarters.

Bitcoin was a standout, jumping 41.9%. Silver saw a strong rebound, rising 28.1%. As can be seen, many asset classes rebounded sharply in the second quarter, after the horrific selloff in March. Crude oil logged its biggest quarterly gain since 1990, while the S&P 500 saw its biggest quarterly advance since 1998. Palladium dropped sharply, and has now fallen four consecutive months. The ten-year Treasury offered near-meaningless returns.

2020 First Half Performance

Bitcoin and gold are among the strongest leaders so far this year. Gold is up 17.1% through the first half of 2020. Bitcoin led the pack with a 27% return. Most other assets, despite the bounce in Q2, remain underwater, the Nasdaq and ten-year Treasury the only major exceptions.

I’ll also point out that the average gold price in the first half of 2020 was $1,644. This stands close to its highest annual average on record: $1,669 in 2012.

The Fed as Gold Driver

The Fed’s “unlimited liquidity” mandate is not only still in play, but was expanded last quarter to include the purchase of individual corporate bonds, even junk bond indexes. This on top of the recently established “Main Street Lending Facility” shows there is little hesitation by the Fed to remain passive.

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