January 6, 2010

Gold's steadfast performance...
by Randal Strauss (01/06/10 - orig. post)
Centennial Precious Metals, Denver

From the end of 2001 ($276.50) to the end of 2009 ($1104.00), gold has exactly quadrupled in value, registering fairly modest and methodical gains each and every year for the past eight years. From any fair-minded assessment, there is certainly nothing frothy or bubbly about its performance of the past year as it compares very typically to the range of these other annual metrics on a percentage basis.

Look at 2002 or 2006, for example, both on a year-end year-on-year performance as well as the gain in the year's average daily price versus that of the prior year. Certainly the prospects for the U.S. dollar bode much worse now (and for the foreseeable future) than they did in either of those earlier solid years for gold and the general economic landscape, and yet gold continued to forge onward and upward along its steady bullish path in subsequent years, yes, even in the context of that relatively comfortable economic period.

Any commentator who mentions "bubble" in the same breath as "gold" in this current environment clearly has an agenda to try to frighten the herd into a retreat back toward a well-defined micromanageable corral where they can all then be more easily fed a steady diet of Wall Street's menu of fabricated and superficial financial products -- bonds, stocks, and derivatives of every imaginable flavor, etc.

And so I say "nuts" to their sordid assortment of scare tactics and myopic vision. Roam free with confidence and with an eye toward the golden horizon my friends.

Randal Strauss
1/6/2010

A Footnote: Further evidence of gold's enduringly strong annual character can be found in our graph below. It depicts the day-to-day gold price fluctuations throughout the course of January - December (expressed as the percentage of each day's price change relative to the first trading day) averaged annually for the 39 year time span from 1971 through 2009.

[And here it must be emphasized that the starting year, 1971, was not chosen arbitrarily, but rather because that was the year that the fixed gold price ($35/oz) of the international gold standard was brought to an end, thus beginning the modern era of market-driven gold prices.]

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