Money

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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PaulE

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,… Read more »

david

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.

LivingtheDream

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

Murf Appling

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

Centurion

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.