Gold is Still the “Star of the Commodities Universe”

gold investment commodityThe dramatic division between gold and most other commodities is largely escaping the media’s radar.  People look at gold on a daily basis and say it is “down,” but compared to what?  Gold is easily beating all other commodities, as shown in small type each day in the Commodities list in the Wall Street Journal:

2017 Performance

GOLD : +9.42%

CRB Commodity Index: -6.14%

The WSJ Dollar Index: -7.12%

Crude Oil: -7.71%

Natural Gas: -25.51%

Source: Wall Street Journal, August 5-6, 2017

The latest weekend Wall Street Journal sported a huge headline, “Dow Industrials Post 8th Record in a Row.” Gold wasn’t mentioned until near the end (the 15th of 18 paragraphs) when the Journal wrote that gold “pulled back” Friday since “prices for gold tend to fall when investors expect tightening monetary policy because the metal struggles to compete with yield-bearing assets.” The Journal and other “experts” have continuously repeated that mantra, even though gold rose after three recent rate increases (from late 2015 to early 2017) and gold rose throughout the previous 17 Fed rate increases from 2004 to 2006.

We’re still waiting for the Journal’s listings of “the best investments of this Millennium,” in which gold would be at the top.  Gold has outperformed stocks by more than 3-to-1, and it has outperformed bonds, the U.S. dollar and real estate as well.  Gold has become the “Rodney Dangerfield” of investments – it “don’t get no respect.”  But our listing of gold vs. stocks since 2000 is a constant reminder:

Gains Since January 1, 2000

Gold: +334%

Silver: +205%

Dow Industrials: +92%

S&P 500: +69%

Print that, Wall Street Journal!

Gold Demand up 17% in First Half of 2017

The mid-year report from Thomson Reuters GFMS (formerly Gold Fields Mining Service) said that gold demand rose 17% in the first half of 2017 to reach 1,895 metric tons (tonnes), despite a sharp drop off in demand for gold exchange traded funds (ETFs), which fell 75% from 569 to 145 tonnes.

In the two biggest markets – India and China –India’s demand nearly doubled to 307.6 tonnes, pushing India into the #1 spot for global demand after years of China’s leadership in gold demand (and supply).

Gold jewelry fabrication rose 22% in the first half of 2017, according to the report (“Gold Survey 2017 H1 Update & Outlook”). Supply declined 5%, they said.  Mine production was slightly down (-0.2%) with notable drop-offs from mines in China and Australia, the two biggest gold producers in the world.

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