After a three-year slump, the price of gold has bounced back this year. For Q1 2016, gold recorded its largest quarterly increase (+16.4%) in almost 30 years. This positive performance continued into April, and gold extended its gain for the year to 21.7%, closing the month at $1,290.50/ounce. This rebound came on the heels of three consecutive annual losses for the commodity that saw its price retreat over 36.6%.
This year’s performance has recalled the halcyon days before the recent slump when gold prices enjoyed a 12-year run (2001–2012) of positive returns, for a total price appreciation of over 515%. Data compiled by Lipper indicates that the surge in the price of gold this year has had a positive impact on the performance of gold funds and consequent new money flowing into them. Advisers, however, may not want their clients to forget that gold as an investment has endured many losing years, if not decades.
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