A little perspective……

(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.

overlay chart showing gold and the DJIA year to date

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 9.79%. An annualized return of 16.88% is something to consider at a time when positive returns have been difficult to come by.

overlay chart showing gold and DJIA's performance over the past 12 monthsCharts courtesy of TradingView.com

Gold Newsletter’s Brien Lundin had an interesting comment along these lines as quoted in Myra Saefong’s MarketWatch column yesterday. “Gold,” he says, “is often seen as a safer bet for investors and Thursday’s plunge in prices, as global stock markets drop, shows that investors have taken refuge in what the precious metal has to offer: cash. If gold’s being sold to raise cash in an emergency, which is what appears to be happening now, then it is doing its job as a safe haven.”

It’s all a matter of perspective……

–– MK

cartoon bear wearing a mask Ramirez and words Wall St.Reprinted with permission michaelpramirez.com

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