The major theme for investors in the first quarter of 2016 seemed to be a flight to safety. With mixed signals of the economic recovery, investors appear to be playing their cards close to their chests.
Causes for the market uncertainty and volatility are wide ranging. Among the factors are the timing of Fed rate hikes, consequences of negative interest rate policies (NIRP) by central banks, China’s slowing economy, the stability of European banks, management of the over-supply of oil by OPEC and the outcome of the British referendum on membership in the EU.
Fragile and Slowing Global Recovery Driving Prices
The International Monetary Fund’s (IMF) Primary Commodity Price Index has declined by 19% since August 2015 according to its April World Economic Outlook (WEO). Precious metals appear to have benefited the most from the uncertain markets.
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