Gold – Surprise, Surprise (January 2, 2019)

by FI Fighter on January 1, 2019

in Precious Metals Updates

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Gold’s fierce year-end rally may have surprised a lot of people… I mean, even peeps like me who are getting kind of used to witnessing these sharp reversals around December timeframe, well, even then, I can’t ever say for certain I expect this trend to continue…

In early December, though, I did write the following post, kinda letting readers know that a rally in gold was something to keep our eyes on…

From December 5, 2018.

And now, we are knocking on the door of $1,300/oz, again…

Silver ain’t doing so bad either, up ~$1/oz, in less than one month’s time…

That would have been a good short-term trade, eh?

Anyway, here’s the 2018 performance chart I found most shocking of them all…

In a year in which many asset classes performed like total shit (e.g. cryptos, lithium stocks, cobalt stocks, even general equities started to wobble slightly, etc.), physical gold putting in a decline of “only” -2.1% from the previous year, well hot damn, that’s not too shabby at all!

Let’s be real here — Only liars will tell you that they make double digit (or triple digit) gains every single year without fail… In the real world and for most everyday real folks, the markets are a humbling beast, and there are up years, and down years…

Nobody likes to lose money, ever, but in the grand scheme of things, a year in which many asset classes got annihilated, being flat/neutral, or even slightly in the RED, is really a cause for celebration.

Live to fight another day…

 

For gold bulls, here’s perhaps even better news — This “stellar” gold price performance came in a period of immense USD strength, when the Fed was tightening their belts and raising rates every freekin quarter (4 hikes in 2018)…

From Wikipedia.

In other currencies outside the almighty USD, gold is even now sitting at/near all-time highs…

Gold price (in AUD).

Gold price (in CAD).

Bet you didn’t see that coming, did you?

How about gold priced in ARS?

To da moon, Alice!

I know most of the entire world Americans (King Dollar ftw baby!) hate gold and thinks it’s nothing more than a stupid pet rock, but as a means to help investors/speculators “store wealth”, shit, it really isn’t doing such a bad job of it…

For myself, no question, I wish at the beginning of 2018 I would have just done the shuffle and gone majority cash/physical gold… I ended up holding on to a few too many mining stocks…

 

*Sigh*

Oh well…

It is what it is…

 

Well, not like too many people care right now, but should the USD, Fed, general equities market, etc. start to wobble wobble some (or a lot) more, who knows, perhaps gold (and gold mining stocks) will finally start to catch a real bid…

And for those wondering what my infatuation with this “useless” non-yielding asset class is, altogether?

Deep Value Investing.

I first suggested that in 2015, and right now in 2019, I’m still a believer!

Gold mining stocks, in particular, are still trading in toilet territory and 99.99999% of people on this planet don’t give a rat’s ass about gold mining stocks…

From risk vs. reward proposition, that’s the opportunity.

But don’t trip, even if gold continues to shine in 2019 (but perhaps we are due for some pullbacks soon), not all these miners will move in tandem… As I learned in 2015/2016, there’s an inherent lag in how some of these junior gold stocks respond to more powerful macro movements…

Yes, it took a lot of research/study/actually paying attention, but hopefully, experience has taught me a few useful things for the next bull run if/when that ever occurs…

 

Until then, I think the spot price of gold is doing pretty damn well, all things considered.

 

Happy Hunting!

{ 1 comment… read it below or add one }

1 Roadmap2RetireNo Gravatar January 1, 2019 at 7:15 pm

Gold had a great year for pet-rock holders 🙂 The US investors may not think so, since they are a bit sheltered, but the rest of the world is buying (or is starting to realize the need to buy) gold.

AUD and CAD are good examples for what happens even in seemingly stable economies. I am looking to continue protecting my assets by hoarding gold in 2019 and beyond.

Happy New Year and look forward to sharing this journey in 2019.

cheers
R2R

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