Above the Fold

Why Gold Continues to Glitter

Gold prices continue to rally to eight-year highs. Sure, the precious metal is often used as a “safe haven” in volatile times, but there may be other forces at work. Gold is what’s called a “hard commodity,” as it doesn’t get consumed, nor does it wilt like soft commodities such as wheat, corn, rice or soybeans. Obviously, its longevity, stability, beauty and usefulness are certainly fundamental reasons why this rare element attracts investors. During volatile times or periods of inflation, gold is viewed by many as a universally exchangeable currency that’s easy to accumulate because so little is worth so much ($1,800 per troy ounce). 

Gold’s value is also influenced by, and correlated with other forces, such as the U.S. dollar, and even the bond market. Since gold’s trading value is expressed in USD terms, a weaker dollar means the price of the heavy decorative element rises. Gold prices also tend to keep up with inflation. In a way, it can act like a zero-coupon bond, without a “maturity value.” 

It’s these last two characteristics that may be driving gold as of late. With high-quality global bond yields extremely low, investors will tend to look for alternatives that will, at minimum, prevent inflation-related losses — gold may check that box. Domestically, interest rates are also targeted to be near zero for some time, which has driven the dollar lower, and also may help support gold prices. So, before you think about gold, be sure the influential factors are all considered. 

Three Things 

1. Macs Are Getting More Apple – Apple will end its 15-year technology partnership with Intel this year as its new Mac computers will ship with in-house chips. The company also plans to bring more third-party components in house to help control quality and logistics.
2. Amazon Getting Serious on Clean Energy – The retail and tech juggernaut is launching a $2 billion “Climate Pledge Fund” that will invest in numerous tech-driven companies and ideas to reduce global climate change impact. Amazon hopes to attain “net zero” carbon emissions by 2040.
3. Mercedes Getting More Than a Graphics Card Upgrade – The german luxury automaker is partnering with high-end graphics chip maker Nvidia to develop a next-generation computing platform. The new systems are expected to add powerful driving, parking and interaction automation, along with over-the-air software updates on the fly. The “Drive” system will even track a driver’s head, eyes and even number of blinks to assess attentiveness.

Did You Know?

Retirees’ Little-Known Tax Break for 2020

In late March, the President signed a measure into law that suspends the required minimum distribution (RMD) for the 2020 calendar year. This means that those of us normally forced to take distributions from retirement accounts will not have to this year. And for those who already took a distribution, there’s also a rule that allows it to be redeposited within 60 days. See your financial professional for details.