A little perspective……
A little perspective…… by Michael J Kosares for USA Gold
TDC Note – This is a treat for Michael to produce to a late day commentary!
(USAGOLD Afternoon Update – 3-13-2020) – It doesn’t help matters that it’s Friday the 13th. In fact, this whole week feels like Friday the 13th with gold down about $145 (or 8.5%) since last Friday’s close. It’s been even worse for silver – down $2.66 or 15.4%.
A single thought comes to mind which I thought I would pass along:
The vast majority of those who own the physical metal do so for long-term, asset preservation purposes. It is easy to lose sight of that bit of perspective on days like today and weeks like the one we are now winding up. Rather than waste a lot of my time and yours with a lengthy dissertation on the merits of gold ownership let me post a couple of charts to make my point and perhaps put the past week into perspective.
The first shows gold’s performance when compared to the Dow Jones since January 1, 2020 – the time period in which the coronavirus evolved from a local problem in China to a world pandemic. As you can see, through today’s closing numbers gold is level on the year and the Dow Jones Industrial Average has lost 19.69%. Gold has not established a base on the moon, but it has held its own in particularly difficult times.
Zooming out, the second chart shows gold’s performance when compared to the Dow over the past 12-months – a period in which the ill-effects of the coronavirus are diluted by a longer timeline. As you can see, gold is up 16.88% over the period and the stock market is down 19.79%. An annualized return of 16.88% is something to consider at a time when positive returns have been difficult to come by.