Alternative Investment News Round-up: Tuesday 3rd May

Silver soars as dollar slumps


Photo: Sirqitous

Silver’s value has soared to a one-year high, as the US dollar has continued to slump.

America’s economy appeared to be on the right track at the end of 2015, with the Federal Reserve deciding to raise interest rates for the first time in almost a decade. Now, though, the Federal Reserve has repeatedly put off any further rate rises, causing sentiment to decline, pushing up demand for precious metals as a safe haven asset.

“The gold market saw renewed buying interest Thursday with weak first quarter US GDP data and a lack of fresh monetary stimulus in Japan combining to soften the dollar and lift the precious metals complex,” reported The Bullion Desk.

Silver, though, has outperformed gold, thanks to its wider industrial usage. With China’s economy showing signs of stabilising, the outlook for industry demand for platinum, palladium and silver improved, noted Forbes.

Bullion boosted by end of Indian jewellery strike

Bullion was boosted at the end of April by the end of a jewellery strike in India.

Jewellery retailers across the country, one of the world’s biggest gold markets, went on strike in protest against a sales tax on gold jewellery that was reintroduced four years after it was abolished.

The strike saw India’s gold imports plummet 80.5 per cent year-on-year in March to $973 million, the government announced.

Despite buyers returning to shops, though, the rebound was not as strong as the industry hoped, as gold’s rising value deterred consumers. Dealers were therefore offering discounts of up to $8 per ounce, with discounts as high as $53 per ounce at one point in late February.

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UK property: Better than gold?

UK residential property could prove a better investment than gold, according to new research. A study by estate agents Jackson-Stops & Staff to mark the Queen’s 90th birthday found that residential real estate values have risen from £619 to £291,504 over the course of her life – a 471-fold increase. If that £619 were invested in gold, it would have risen to £127,051 today (gold was £4.25 an ounce in 1926, and recently reached £876 per ounce).

Brexit uncertainty weighs on farmland values

Uncertainty surrounding the result of the UK’s June EU referendum is weighing on English farmland values.

The latest Knight Frank Farmland Index shows that average values fell 3 per cent in the first quarter of 2016, taking prices back below the £8,000 per acre mark – the largest quarterly drop since the 5 per cent slide that occurred at the end of 2008 in the wake of the Lehman Brothers’ collapse.

Agricultural land has, historically, proven a valuable investment. In the last 50 years, prices have surged 4,886 per cent. In the last 12 months, though, the market’s growth has significantly slowed, with prices down 2 per cent across 2015.

“Given the significant issues weighing on the market at the moment, a period of readjustment is perhaps unsurprising,” says Knight Frank’s report.