Time Yet For Gold?

We watched the movie “The Italian Job” a few nights ago. It’s the heist movie where Mark Wahlberg, Charlize Theron, and company steal and re-steal $35 million in gold bars.  It got me thinking about the trend in gold prices since I last wrote this article almost 18 months ago:

LINK – Gold: An Investment In Fear?

Despite being considered an excellent hedge against inflation and economic downturns, gold continues to be stone cold.  In fact, gold has dropped for the sixth straight month and is approaching its longest losing streak in 30 years (back to 1989).  It’s down -13% in calendar 2018 and that’s despite inflation starting to rise. 

As I’ve written in the past, gold seems to be primarily a hedge against doom and gloom in the economy and with most financial measures looking up, few are seeing a lot of opportunity in investing in it.  Nonetheless, late night TV is filled with infomercials lauding it’s potential and security. 

While I’m sure gold prices will move up again at some point, it remains a bit of an enigma to me among investments.  The only thing it seems to correlate with is some sort of a global fear index and that’s pretty difficult for me to assess. 

Anyone predicting a gold rebound?

Image Credit: Pixabay

9 thoughts on “Time Yet For Gold?

  1. I rarely predict. I often participate. Gold as a commodity has a place in my well diversified portfolio. It serves needs of capital preservation and long term planning. Personally, I minimize metals held in person, preferring metals held through investment instruments. Folks who fear imminent doom may prefer to keep gold close at hand, along with deadly security measures to protect it.

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    • Yes – many people invest in gold through ETFs or Spyders where the actual gold is kept at a central depository. Keeping even 1% of our wealth in gold at home would be too much for me!

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  2. I try not to predict anything with PM’s, lest I become the gold bug I always feared I was. I do however enjoy having a percentage of my assets in gold/silver/platinum/palladium because it is a smart idea. Who knows what will happen in the future, but gold is an age old decent bet and belongs in a well diversified portfolio.

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  3. I don’t think the price of gold over the last decade has had so much to do with bearish investor types, as with its use as a display of wealth among the rising middle class in Asia, particularly India. China and India are the #1 and #2 consuming countries in the world, both about 5x the US. (China is also the biggest producer, though) It was interesting to see the impact of long-held cultural practices in buying gold be impacted by the runup in price, such as introducing “diversification” with precious stones instead of gold-only jewelry. In a broader sense, there will also be similar impact with other middle class signals, such as travel, real estate, and large consumer goods (cars and appliances).

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    • Gold had quite a run-up in price until 2011, then it crashed. I had not thought of its status benefit/use in jewelry as a major price driver.

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