1/3/10 The Best Investment From 2000-2009: Gold

Precious Metals Market Analysis, By Michael Pennington (Copyright 2010 Pennco Coins)

The chart below from Bloomberg tells the story – a $100 investment in gold when the market opened on January 3, 2000, was worth about $385 as of this week (data through December 21) – that’s a total return of 290 percent and an annualized return of 14.5 percent. Gold stocks (as measured by the XAU Index) have also had a good decade, climbing 9.4 percent annually.
Commodities (as measured by the S&P GSCI Enhanced Total Return Index) posted average gains of 13.6 percent per year over the period, driven mostly by rapid economic growth in Asia and elsewhere in the developing world.
There are many commentators out there who see no value in gold and who denounce it as an investment at every opportunity. They are certainly entitled to their opinions, but it’s hard to argue with the facts over the past 10 years. Investors in the stock market had a 0% gain over the past ten years.
What the next decade will bring for gold? Who knows. But I do know one thing – those who held gold for the past 10 years will have a happier New Year than those who listened to the perma-skeptics.

Major Bull Market in Gold Since 2001

Dec 2001     $276.50
Dec 2002     $348.10     Up 25.90%
Dec 2003     $415.70     Up 19.42%
Dec 2004     $437.50     Up 5.24%
Dec 2005     $517.10     Up 18.19%
Dec 2006     $638.00     Up 23.38%
Dec.2007     $838.00     Up 31.2%
Dec 2008      $869.00    Up 3.5%
Dec 2009    $1,096.20    Up 24.8%

Major Bull Market in Silver Since 2002

Date     Spot Price     % Increase
Dec 2002    $4.80
Dec 2003    $5.95    Up 23.96%
Dec 2004    $6.81    Up 14.45%
Dec 2005    $8.82    Up 29.51%
Dec 2006    $12.93    Up 46.60%
Dec. 2007    $14.80    Up 14.5%
Dec 2008    $11.08    Down 27.2%
Dec 2009    $16.99    Up 53.3%

Technically, Silver looks very good going into 2010.. The Momentum measured by MACD has turned up as well as the Relative Strength Index, both very positive signals. Now that Silver has reached a short term support level it appears ready to resume its climb back over the 2008 high. As I said earlier, I am very positive regarding Silver this year. The demand keeps growing while the supply continues to dwindle. Something soon has to break open soon and I strongly suspect it will break to the upside in a panic mode.


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This entry was posted in Dollar, Federal Reserve, Gold, Gold to Silver Ratio, Palladium, Platinum, Silver and tagged , , , , , , . Bookmark the permalink.

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