Bordeaux ‘outpacing’ Burgundy on Liv-ex

Three weeks into the New Year, and it seems Liv-ex is enjoying a slight bounce, if only because it’s no longer 2014.

Justin Gibbs, Liv-ex director

“The year has started in a reasonably good manner, you put a poor year behind you and start with a fresh slate with a sense of everything to go for, ” Liv-ex director, Justin Gibbs, told the drinks business.

“There has also been more to Chinese New Year than there was last year, and the dollar has strengthened against the Euro. The US seems to be back in the market, having been absent for some time.”

He added: “Bordeaux seems to have found a level at which buyers are prepared to return to the market, and it has begun to outpace the likes of Burgundy and Champagne in the last six months.”

The weakening of the Euro against the US and HK dollar, and to a lesser extent the pound, obviously makes Bordeaux more attractive to those outside the Eurozone. The prospect of quantitative easing, or printing money to stave off deflation, has already caused the Swiss Franc to soar 20%, while the US dollar is up 5% since January 5^th.

“Currency volatility is never a good thing because it makes decision-making more difficult,” said Gibbs. “People tend to sit on their hands until currency settles down.”

In its latest market update, Liv-ex recorded no surprise that tangible assets like gold have already risen 7.5% in 2015. “As hedge funds implode, currencies gyrate and banks build provisions against their trading books could it be the year for safe havens?” And if gold, why not fine wine?

Liv-ex 50 vs Gold – 5 years