All this might scream ‘buy stocks’ to a contrarian, but the S&P, FTSE100 and other global indices already trade at record highs on low volatility. And it all pales next to 2017’s single biggest risk: Donald J.Trump. Already whacking individual share prices with his tweets, the new US President threatens emerging markets through his anti-Mexico and anti-China stances. Trump also looks sure to row with the Fed, wanting to weaken the Dollar even as his cash and jobs repatriation policies push it higher. Real interest rates look likely to fall as inflation rises ahead of Fed rates on Trump’s trade tariffs and high-spending, tax-cutting plans.
So what about gold’s January rally? Currently 5% higher this month, bullion tends to do well when other assets do poorly, helping reduce losses and improving returns for UK portfolios over the last 20 years. ETF holdings meantime start 2017 at half their 2011 peak by value, and bullish betting on US futures and options stands two-thirds below July’s Brexit-shock peak. Despite 2017’s risk-heavy diary, holding gold as crisis insurance remains a long way from a crowded trade this New Year.