Jan 8, 2020

Gold has been 2020's star asset

U.S. equities have been both resilient and rangebound following the killing of Iran Gen. Qasem Soleimani, but gold has seen a major boost, jumping to its highest level in close to seven years and continuing to climb.

The big picture: Even in the face of better-than-expected U.S. data released Tuesday morning, gold edged higher.

  • It then took another leg up after Iran retaliated against the U.S. by striking U.S.-Iraqi bases Tuesday night.

Details: Gold prices have gained nearly 4% in the nascent year and the commodity has been one of the best performing assets in the world.

  • Gold trails only returns for orange juice (yes, really), a gauge of energy infrastructure Master Limited Partnerships (MLPs), and the rebounding Chilean benchmark stock index, per FactSet data.
  • It has delivered about triple the return of the Nasdaq and more than quadruple the S&P 500.
  • Even crude oil (up 2.7% YTD), which also has gotten a price bump from the growing unease in the Middle East, has fallen well short of gold's gains so far in 2020.

Go deeper: Gold mining companies are shunning big projects despite rising prices

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What Middle East crisis? Why oil prices aren't rising

Data: EIA; Chart: Axios Visuals

Despite rising unrest in the Middle East — including the death of an Iranian commander — America’s average gasoline prices have remained under $3 a gallon.

Why it matters: Practically speaking, it’s great for drivers’ pocketbooks — and President Trump’s re-election campaign. It also shows the remarkable cushion created by the United States' booming oil production, which has doubled over the last decade.

Go deeperArrowJan 8, 2020

Stock market rallies despite coronavirus outbreak

Illustration: Aïda Amer/Axios

Little has changed about the fundamentals since last week's selloff that was the worst in months, but bullish stock traders have bid back all of the the S&P 500's losses and sent the Nasdaq to a new record high.

What's happening: The market continues to bet on generous central banks providing stimulus to help the global economy recover from the novel coronavirus outbreak that has stalled supply chains, closed businesses and quarantined millions of people.

Podcast: Blood and oil

Gas prices in the U.S. are stable, despite the unfolding crisis with Iran. Dan and Axios energy reporter Amy Harder discuss if this is the new normal.

Go deeper: Why oil prices aren't rising