Gold has suffered a painful bear market since 2011, falling 740 USD (38%) from its peak. Now many investors are wondering if it has finally found a bottom. In October gold tested the 1,180 USD level for the third time since June 2013. Is this a bullish «triple bottom» in technical jargon, or a sign of further weakness? Nobody knows, but an abundance of geopolitical and economic risk around the world suggests the former. Gold is often used as a hedge against tail risk or stress in the financial system.

Gold Spot

Source: Bloomberg, Van Eck Research
Data as of 15 Oct 2014

About the Author:
Joe Foster has been Portfolio Manager for the Van Eck International Investors Gold Fund since 1998 and the Van Eck – Global Gold UCITS Fund since 2012. Mr. Foster, an acknowledged authority on gold, has over 10 years of dedicated experience in geology and mining including as a gold geologist in Nevada. He has appeared in The Wall Street Journal, Barron's, and on Reuters, CNBC and Bloomberg TV. Mr. Foster has also published articles in a number of mining journals, including Mining Engineering and Geological Society of Nevada.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.