In the first quarter, gold registered its strongest quarterly gain in 30 years. But what lies ahead for the metal?
 
Depends, of course, on whom you ask and which macroeconomic indicators and other evidence they choose to accentuate.
 
A piece by Bloomberg argues that gold, which jumped 17% in value last quarter, could add more nice gains ahead, thanks in part to the bullishness of hedge-fund managers.
“While gold futures have dipped from a 13-month high, hedge funds are the most bullish since January 2015,” writes Bloomberg’s Megan Durisin.
 
According to the data-oriented financial website, hedge funds boosted net-long holdings in gold futures and options by 2.1 percent to 164,946 contracts in the week ended March 29, according to U.S. Commodity Futures Trading Commission data released three days later.
 
“Money managers have increased bullish wagers in three of the past four weeks,” Bloomberg adds.
 
The article also argues that the Federal Reserve’s new go-slow approach to raising short-term rates will have a negative effect on the dollar’s value, which should help the price of goal. The greenback in March, writes Bloomberg, posted its biggest monthly loss since 2010 against a basket of 10 currencies.
 
Gold over time has tended to have an inverse correlation with the dollar. Because the metal is denominated in dollars, a weaker dollar makes its easier for foreign purchasers of the metal to afford it.
 
Also, gold, which doesn’t pay a yield, appears to be a better asset when the yields than an investor can get for holding alternative assets diminish.
 
Bloomberg quotes one money manager, Adrian Day, president of Adrian Day Asset Management in Annapolis, saying that the “fundamentals, particularly easy-money policies globally, are very positive.

The dollar seems to have peaked, at least for the short-term.”
 
Anyone who wants to buy gold without opening up a commodity account can purchase shares of SPDR Gold Trust, a popular exchange-traded fund.
 
Meanwhile, The Wall Street Journal sees a different future ahead for gold, emphasizing other data points in its analysis.                  

The Journal argues that the very investor enthusiasm cited by Bloomberg “suggests gold’s shine is set to dull sooner rather than later.”
 
The Journal’s Steven Russolillo writes that “gold often thrives as a haven in times of turmoil, or acts as a hedge against inflation. Devotees love pointing to negative interest rates around the globe as evidence that has recently made gold glitter more than usual.”
 
He adds that “the problem is these theories don’t take into account a fundamental analysis of gold’s intrinsic value: It doesn’t really have any. Unlike many financial assets such as stocks, bonds, real estate and others, gold doesn’t generate any income. Valuing it is virtually impossible.”
 
Russolillo argues that the positive sentiment on the metal appears overextended.
 
“As Mike Dragosits of TD Securities puts it, bullish exchange-traded-fund inflows and sanguine net speculative positioning have reached extreme levels,” he writes.
 
Russolillo contends that those statistical yardsticks have “been contrarian signals. Gold is now facing a near-term correction risk.”
 
The WSJ article contends that the turbulent times that helped push gold higher at the beginning of the year have largely dissipated.
 
“Most of gold’s first-quarter gains came during the first six weeks of the year, when fear about China and the global economy was paramount,” Russolillo writes. “Financial markets have calmed, economic data have been better and overseas action has steadied, including Friday’s optimistic report on Chinese manufacturing activity. Gold already has fallen about 4% since last month’s peak, largely a result of those improving trends.”
 
I’ll close with a look at a piece on the cheapest stock markets by UK’s The Telegraph, which has one of the best business sections of any British newspaper.
 
The article, written by James Connington, uses three different valuation metrics, including the cyclically-adjusted price-to-earnings ratio, as well as standard price-to-earnings and price-to-book ratios.
 
Among his conclusions: “Many emerging markets have struggled in recent years, due to a culmination of slipping Chinese growth (China being a major importer), falling oil and commodity prices, and the strength of the dollar (in which commodities are largely priced). But some emerging markets still offer a wealth of long-term potential, and there is significant value to be had.”
 
The article quotes Caroline Simmons, deputy head of UK investment at UBS Wealth Management, who says that he likes “China and Turkey out of the emerging market countries.”