Finance

Gold is Up in Price While Nearly Everything Else is Down

gold coins peak value price investment“While so much about the current environment remains unclear, there’s one thing that isn’t: gold, which—unlike people and our economies—is immune to the virus.”

–Goldman Sachs head of global commodities research Jeff Currie, in a note to clients.

As we near the end of the tumultuous first quarter of a new decade, nearly every investment has fallen sharply, but it appears that only gold has held its own in global markets, along with the U.S. Dollar, which just set a new high. U.S. stocks were off over 35% from their peak at one point, while crude oil has collapsed over 60% and overall commodities are off over 30% due to the abrupt global growth slowdown.

Investment                  December 31, 2019     March 25, 2020           Change

Gold                                       $1,515             $1,615                         +7.7%

Silver                                      $18.04             $14.58                         -19.2%

Platinum                                 $971                $738                            -24.0%

S&P 500                                 3,230               2,475                           -23.4%

Dow Jones Industrials             28,538             21,200                        -25.7%

Crude Oil                                $61.21             $24.31                         -60.3%

Overall, the CRB commodity index is down 30.24%, year-to-date, through March 25, which makes gold’s +7.7% performance outstanding in context of most other major investments collapsing. Due to the global economic slowdown, industrial metals are also down by double-digits for the year to date (that is why silver is down so far, since the majority of its demand is for industrial usage, not for coins or bars).

The stock market reached its bottom (so far) on Monday, March 23, but it suffered its worst single point loss the previous Monday, March 16, when the Dow lost 2,997 points and the CBOE Volatility Index (VIX) hit its highest-ever level, even higher than its 2008 peak after the S&P 500 fell 40% in two months.

It’s not too late to get on board with gold, since stocks will remain volatile as long as (1) the coronavirus keeps expanding around the world, slowing economic growth and spreading panic; (2) the political infighting grows during this controversial election year; (3) Saudi Arabia wages a deflationary price war on the global price of oil; (4) global central banks push interest rates further below zero; and (5) the world’s nearly-forgotten “hot spots” take advantage of this global unrest to expand their power.

Gold has been a proven crisis hedge in times like these. In this crisis environment, gold has once again established itself to be the only safe investment for most investors and I believe gold will continue to trend higher!

Dr. Mike Fuljenz
America’s Gold Expert ™
Numismatic Consultant to First Fidelity Reserve

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GRELLA GRELLA
1 year ago

If buying gold is such a smart thing to do, why then are there so very many commercials pitching gold ? Would you sell gold if you knew it was going up in value ? Obviously, we’re not getting the whole truth. They’re selling gold because they have held it for so many years and / or decades , bought it when it was cheap , and inflation high . And, now , having used it as the hedge against that old inflation, they now want to sell it to you just as our economy is roaring ahead. They want you to ride it down so they can pick it up in the future if things get bad again. This is called a correction . Just like on Wall Street . They want to sell the gold to you so they can invest the funds to make money . In the distant future , when there is a financial downturn coming , they’ll then need it again as a hedge. And, that’s when they’ll buy it back from you at deflated prices. In effect, you’ll only be holding it for them until they need it again. Correct ? Just like on Wall Street , they say there was a ‘Big Sell-off” today on the street. And then later they describe it as a “correction” . Get it ?

LivingtheDream
1 year ago

Gold is going to $2000oz. By shares in a gold mining stock. You will be glad you did!

GRELLA GRELLA
1 year ago
Reply to  LivingtheDream

You selling ?

Centurion
1 year ago

All this talk about gold is foolish nonsense. Its price is just too high. Only the 1%ers can afford to buy gold. The common person, like me and 95% of the rest of us, were priced out years ago. Silver, on the other hand, is something we can get into. With its price drop we all can afford to invest in this metal.

GRELLA GRELLA
1 year ago
Reply to  Centurion

Do you actually think that “investing” in gold that you know is declining in price is an “investment”. Instead of buying gold that’s going down in value, buy stocks or something else going up in value. After all, that’s what the current holders/sellers of gold want to do (with your money) .

Murf Appling
1 year ago

What is the current thought regarding “Silver” – understand it is very HOT right now!! Supplies dwindling??

Centurion
1 year ago
Reply to  Murf Appling

There is no problem with supply. Silver is the poor man’s (as 95% of us are) gold. And with the price being down now is the time to buy.

PaulE
1 year ago
Reply to  Murf Appling

We have record supplies of silver world-wide. There is no shortage on the near-term or long-term horizon. Stop watching the endless TV commercials concerning any of the previous metals. Those are just precious metal dealers trying to hype what they sell to what they hope is a gullible public.

david
1 year ago

Two weeks ago, gold was around $1800. Now it is $1650. Like anything else, it fluctuates. We are told not to time the stock market. I feel the same way about gold. And you can’t eat it either.

PaulE
1 year ago

While gold, as well as silver and platinum, is indeed a hedge against dollar devaluation and everyone should commit a small fraction of their overall investment portfolio to gold (3 to 4 percent maximum), it seems the crypto-currencies are benefiting far more than gold during this latest so-called “flight to safety” panic. At least amongst the trading community. Not that I personally would commit a single dollar to any crypto-currency given the consistent cases of fraud and out-right theft that are regularly reported on.

As for purchasing gold, as the media fueled panic over the Wuhan Virus eventually dies down and it eventually will as the media moves on to its next topic, the price of gold will fall back to much more attractive prices. That is when people should consider purchasing gold, if they desire to do so. Even now, the price of gold is declining as financial certainty, as the talking heads on TV call it, is restored to the markets post actions by both the Federal Reserve and our Keystone Cops Congress.

GRELLA GRELLA
1 year ago
Reply to  PaulE

The purpose of gold is to serve as a hedge against inflation. So, like stocks, buy low and sell high. And that’s why there is so much gold for sale these days. The people who have gold want to sell it to you before it’s price collapses. They want to use that money in the economy. They don’t want to buy more gold. Understand ?

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