I wasn’t going to write anything until next week, but reporting on the annual performance for gold and silver in the first week of the year is appropriate and timely.
Publishing the following table has been an annual event in my work for the past few years. Using the last published value of the year for gold and silver (not their bull / bear market, high / low prices) I calculate the annual performance as well as how far metal prices has gone in their bull or bear markets on an end of year basis. Metal prices for the 1980 to 2000 bear market bottomed in 2000, with 2001 (Green Row) being year one of the current bull market.And yes the PM mining shares and the old monetary metals are still in a bull market.
Looking at the price of gold from 2000 to 2012; gold saw twelve yearly gains. This is remarkable for two reasons; I know of no other market series that saw twelve consecutive annual gains. The Dow Jones has never seen twelve consecutive years of advances, yet somehow during this entire twelve year period, the financial media was successful in maintaining a wide spread public revulsion toward the gold and silver markets.Darn right they did, and they continue doing so today. Silver during this period (2000-2012) saw only two down years, and frequently saw double digit gains that far outperformed those holders of gold enjoyed.
At the close of 2016, gold saw its first annual advance since 2012. An 8.51% advance may not seem like much, but neither was the 2.46% gain seen in 2001. Keep in mind that although the gold bulls at the end of 2016 are disheartened, the price of gold has still advanced 323% from its close of December 2000.Â
That’s something the Dow Jones, S&P 500, Nasdaq Composite indices and most of the groups in the Dow Jones Total Market Group can’t say. And that’s with the metals near the bottom of a three year correction as most major stock indexes now find themselves at, or just a whisker from their all-time highs.
Silver was up 14.98% from a year ago, not that it feels like it. Historically, silver outperforms gold, something that the table above (first table) shows is something silver has failed to do since 2000. I expect silver will once again outperform gold, maybe starting this year.
A note on the bull market data for 1977 to 1979; the percentage gains are based on the closing prices of 02 January 1969:
- Gold:$43.50
- Silver:Â $1.85
Can you imagine buying an ounce of gold for $43.50, silver at $1.85? Or that when gold broke above $100 in May 1973 the world held its breadth. Probably not. But then in 1969, who could have imagined gold trading at $1,151, or that seeing the price of gold over $1,000 would inspire pessimism in the gold market. These are emotional reactions to the changes in the price of gold, and responding to emotions is no way to make money in the market.Â
