Plunging oil prices, rising market volatility, surging global debt—it’s all beginning to remind some investors of 2008. Earlier this month, billionaire former hedge fund manager George Soros warned of an impending financial crisis similar to the last major one, which sent shockwaves throughout global markets.
The comparisons to 2008 have triggered gold’s Fear Trade, with many investors scrambling into safe haven assets. Jeffrey Gundlach, the legendary “bond king,” recently made a call that amid further market turmoil, the metal could spike as much as 30 percent, to $1,400 an ounce.
Making such predictions is often a fool’s game, but there’s no denying that gold demand is on the rise, both in the U.S. and abroad. For the one-month period ended January 20, gold (and silver) outperformed, comfortably beating domestic equities as well as a basket of other commodities.
I’ve already shared with you the fact that gold has historically had a low correlation with equities. This point is worth reiterating: When equities have zigged, gold has zagged. And with volatility high in global markets right now, many investors are choosing to rotate a portion of their portfolios into the precious metal.
This was the advice of my friend Marc Faber, who recently warned investors in his influential “Gloom, Boom & Doom Report” newsletter that global stocks could fall an additional 40 percent on mounting liquidity and debt problems. In the event such a crisis occurs, Marc says, investing in gold—which, again, has been shown to be inversely correlated with stocks—might be one way to protect one’s wealth.
I’ve always recommended a 10 percent weighting in gold: 5 percent in physical bullion, the other 5 percent in gold stocks or mutual funds. This applies in all market conditions, good or bad.
Something else I want to draw attention to in the chart above is the extreme divergence in performance between gold and oil, which is trading at levels we haven’t seen in a long while. Declines in oil have traditionally invited enormous selloffs in other commodities, making gold’s resilience at this time all the more impressive.
China Consumed Nearly All of Global Gold Output in 2015
Investors in China appear to recognize the importance of gold in times of market uncertainty. Since June 2015, the Shanghai Composite Index has dropped close to 45 percent, prompting scores of retail investors to pivot into safe haven assets such as gold. As you can see below, 2015 was a blowout year for the Shanghai Gold Exchange (SGE), which in the past has served as a good measure of wholesale demand in China.
Not only did gold deliveries climb to a record number of tonnes in 2015, they also represented more than 90 percent of the total global output of the yellow metal for the year.
The SGE has made it incredibly easy for Chinese citizens to participate in gold investing. Recently it rolled out a smartphone app, making it more convenient than ever before to open an account and begin trading.
Gold Miners Are Winners of the Currency Wars
Gold priced in the strong U.S. dollar might have netted a loss in 2015, but in many other parts of the world, prices were either stable or even made gains. For buyers of gold in non-dollar economies, it’s the local price that matters most, not the dollar. In Russia, the third-largest producer, the metal rose 12 percent—and came close to an all-time high. In South Africa, the sixth-largest, it was well above the all-time high. Investors there saw returns of greater than 20 percent in 2015.
This has been beneficial to many mining companies based outside the U.S. Operations are paid for in local currencies—most of which have weakened in the last year—but companies sell their production in U.S. dollars. This has helped offset the decline in gold prices since they peaked in 2011.
Canadian-based companies such as Claude Resources, Richmont and Agnico Eagle Mines are performing well, even in the gold bear market and amid high volatility.
For the last three years, gold miners all over the globe have been thoroughly beaten up. Today, they’re heavily discounted, and there are signs that conditions are stabilizing.
With the Fear Trade heating up, it’s important that we manage our expectations. The length and extent of the current bear market, which began in September 2011, might seem unprecedented to many investors. In actuality, it doesn’t veer very far from what we’ve seen in the past, according to data presented by the World Gold Council (WGC).
Reaching back to 1970, the WGC identified five bull and bear markets, with bull markets defined as periods when gold prices rose for longer than two consecutive years, bear markets as the subsequent periods when they fell for a sustained length of time. Although these lengths vary, the cumulative loss in each bear market is relatively uniform, with median returns at negative 42.7 percent.
The present bear market, at negative 44.1 percent, falls easily within the realm of normalcy.
Further, the table suggests that a turnaround in gold prices is overdue.
levitra erfahrungen ciprofloxacin hcl 500 mg tab cialis 5 mg cipro antibiotics natural viagra viagra prices what infections does ciprofloxacin treat discount cialis finasteride permanent side effects lexapro withdrawal symptoms does lexapro cause weight gain cialis 20mg wholesale cialis order viagra ciprofloxacin coverage cialis testimonials side effects lexapro online cialis vardenafil vs viagra finasteride viagra costs azithromycine cialis patent expiration 2017 zovirax cream cialis daily viagra 50mg viagra without a doctor prescription usa side effects of finasteride 5mg 200 cialis coupon lexapro 10 mg post finasteride syndrome what is lexapro buy cialis online how long for lexapro to work side effects of ciprofloxacin 500 mg tamoxifen cost cilias levitra bayer 20mg meilleur prix zovirax for cold sores levitra 20mg cost per pill side effects of acyclovir viagra tablet equipe argentine viagra viagra 100 finasteride 5 mg cialis 5mg daily ciprofloxacin 250 mg tamoxifen interaction azithromycin pediatric dosing generic viagra 100mg viagra bestellen ciprofloxacin lexapro dosage how to get off lexapro finasteride medication acyclovir vs valacyclovir azithromycin drug class cialis 30 day trial coupon cialis discount generic for cialis side effects of lexapro 10 mg acyclovir for shingles levitra 20 mg levitra 20 mg cost walmart cialis otc cialis for women what is ciprofloxacin prescribed for ciprofloxacin side effects in women ciprofloxacin 500mg antibiotics viagra substitute over the counter viagra cialis copay card cialis alternative viagra 100mg viamedic cialis cialis 20mg directions azithromycin tablets cialis cost ciprofloxacin uses weaning off lexapro tamoxifen bijwerkingen viagra coupon viagra vs cialis escitalopram side effects finasteride dosage viagra medicine lexapro generic azithromycin 250mg lexapro reviews side effects of azithromycin 250 mg cialis sample what does ciprofloxacin treat viagra tablets azithromycin tablet ciprofloxacin used for azithromycin cost cialis from canada side effects of lexapro in women cialis 20 mg lexapro side effects in men zovirax is tamoxifen chemotherapy side effects of finasteride side effects of ciprofloxacin zoloft vs lexapro ciprofloxacin for dogs viagra from canada escitalopram 10mg revatio vs viagra viagra on line zithromax z-pak how to use viagra lexapro medication how to wean off lexapro cialis pricing cialis canada generic viagra acyclovir 200mg viagra alternative sophia viagra how much does cialis cost cialis prices what does viagra do azithromycin class how long for azithromycin to take effect how to take cialis canada viagra finasteride and enlarged prostate escitalopram 10 mg para que sirve finasteride side effects in men antibiotic ciprofloxacin cipro dangers levitra prezzo in farmacia lexapro dosing what is ciprofloxacin ciprofloxacin ophthalmic solution cialis 5mg viagra cost lexapro 10mg azithromycin z pak cialis coupon 20 mg propecia side effects what is tamoxifen used for women viagra viagra tesco viagra receptfritt what is cipro used for acyclovir dose generic lexapro cialis pills cipro cipro dosage what bacteria does ciprofloxacin kill viagra nebenwirkungen what is acyclovir for lexapro side effects in women levitra vs viagra finasteride for hair loss how does acyclovir work viagra pills azithromycine eg 500 mg bijsluiter tamoxifen side effects lexapro overdose cialis price finasteride efectos secundarios free cialis levitra vs viagra for hardness viagra canada buy generic levitra lexapro side effects lexapro generic name finasteride 5mg side effects canadian viagra cialis free trial nolvadex effects of stopping lexapro suddenly azithromycin 250 mg treatment cialis samples overnight generic levitra buy generic viagra viagra dosage cipro uses acyclovir dosing ciprofloxacin hcl 500 mg lexapro coupons viagra kaufen what is lexapro for viagra online generic cialis at walmart levitra 20 mg precio farmacia buying viagra cialis savings card lexapro weight gain lexapro for anxiety what does finasteride do ciprofloxacin bnf azithromycin for uti azithromycin vs erythromycin viagra natural lexapro and weight loss ciprofloxacin dose levitra 20mg cipro 500 what is lexapro used for discount viagra cialis coupons from manufacturer generic levitra vardenafil 20mg what is cipro usually prescribed for cialis vs viagra azithromycin 250mg tablets 6 pack what works better than viagra tamoxifen lawsuits ciprofloxacin nebenwirkungen viagra soft escitalopram 10 mg finasteride 5mg side effects mayo clinic propecia best price viagra ciprofloxacin side effects after age 60 finasteride reviews lexapro benefits for women cialis cheap escitalopram finasteride hair loss vardenafil 20mg cipro for uti escitalopram oxalate viagra vs cialis vs levitra finasteride 5 mg tab azithromycin 5 day dose pack what is cialis levitra levitra generic cialas buy viagra acyclovir zovirax pills lexapro side effects men finasteride 5mg tab price cialis thuoc azithromycin tamoxifen and weight gain tamoxifen nebenwirkungen tamoxifen side effects in women over 55 cialis on line azithromycin for strep throat cipro side effects in elderly viagra for men where to buy viagra withdrawal from lexapro viagra vs cialis vs levitra what does azithromycin treat lexapro vs celexa viagra samples azithromycin medscape ciprofloxacin drug class viagra 100 mg cialis dosage recommendations zithromax cialis online cialis dosage side effects of lexapro online viagra viagra wiki lowest cialis prices effects of stopping finasteride cialis for bph viagra vs cialis what is azithromycin for ciprofloxacin hydrochloride ophthalmic cialis azithromycin liquid tamoxifen therapy cialis or viagra ciprofloxacin 500mg antibiotics side effects finasteride for women cialis coupons cialis generic tadalafil ciprofloxacin side effects ciprofloxacin 500 mg for urinary tract infection acyclovir dosage tamoxifen finasteride long term effects tamoxifen and foods to avoid azithromycin buy levitra online common side effects of ciprofloxacin 500 mg viagra ohne rezept aus deutschland how does lexapro work finasteride 5mg tamoxifen side effects in women viagra alternatives what is azithromycin used for zithromax 500 mg ciprofloxacin 500mg cialis medication cheap cialis what is viagra levitra 10 mg prezzo female viagra how does cialis work what is tamoxifen cialis patent expiration azithromycin for pneumonia escitalopram effets secondaires how to wean off lexapro without withdrawals levitra without a doctor prescription erectile dysfunction cialis azithromycin 500 viagra effects viagra generic cialis vs viagra azithromycin side effects cipro and tendonitis lexapro and weight gain cialis pharmacy prices viagra pillen kruidvat cialis coupon lexapro and weight gain in women what does ciprofloxacin 500mg treat acyclovir dosage for cold sores side effects of viagra canadian cialis viagra coupons finasteride effets secondaires cialis patent expiration date extended cialis 30 day sample what is finasteride used for cialis side effects cialis canadian pharmacy lexapro manufacturer website levitra rezeptfrei deutschland is azithromycin when will cialis go generic azithromycin 500 erfahrungen cipro drug class cialis for daily use what is ciprofloxacin used for cialis coupons 2017 9 levitra at walmart levitra online ciprofloxacin 500 mg tabletten azithromycin 500mg cialis 10 mg acyclovir 800 mg 5 times a day ciprofloxacin dosierung viagra en ligne livraison 24h ciprofloxacin 500 mg cialis effects cialis generic azithromycin uses azithromycine 250 mg escitalopram 20 mg ciprofloxacin 500mg tablets what is escitalopram viagra sans ordonnance lexapro sex viagra for women viagra on line no prec azithromycin 500 mg generic cialis tadalafil ciprofloxacin 250mg cialis pills for sale cipro antibiotic viagra generico celexa vs lexapro cheap viagra acyclovir 800mg free viagra generic cialis lexapro vs wellbutrin lexapro dosages wellbutrin and lexapro acyclovir 400 mg canada cialis what is finasteride ciprofloxacin hydrochloride azithromycin and alcohol liquid cialis side effects of cialis cipro side effects ciprofloxacin class how long does viagra last viagra price finasteride tablets buy cialis acyclovir cream tamoxifen langzeitfolgen tamoxifen and bone pain ciprofloxacin spc is ciprofloxacin a penicillin acyclovir ointment 5 first few days on lexapro ciprofloxacin hcl 500 mg side effects finasteride 1mg levitra coupon ciprofloxacin dosage cialis coupon print lexapro bula side effects of tamoxifen lexapro withdrawal acyclovir for cold sores levitra dosage lexapro para que sirve acyclovir ointment zovirax ointment acyclovir 400mg cialis coupons printable viagra cialis zovirax dosage viagra ohne rezept auf rechnung viagra for women cialis generic availability viagra pill what is acyclovir used for ciprofloxacin eye drops cialis samples acyclovir medication cialis reviews levitra prices cialis trial levitra vs viagra cheap levitra stopping lexapro what is azithromycin cialis website levitra coupons finasteride results what is acyclovir cealis finasteride vs dutasteride viagra wikipedia cialis for men acyclovir side effects azithromycin 250 mg azithromycin coverage lexapro 5mg lexapro and wellbutrin combination therapy azithromycin eye drops acyclovir 800 mg for shingles viagra activate viagra 100mg tablets retail price finasteride side effects how does viagra work azithromycin 250 buy levitra levitra 20 mg von bayer ciprofloxacin hcl escitalopram nebenwirkungen pfizer viagra coupons from pfizer cialis for sale ciprofloxacin 500 is azithromycin penicillin buy viagra online side effects of azithromycin cyalis viagra for sale is lexapro a controlled substance viagra for sale uk utilisation viagra acyclovir 800 mg pfizer viagra azithromycin without a doctor’s prescription lexapro vs zoloft ciprofloxacin drops lexapro 20mg cialis tadalafil generic for lexapro viagra single packs viagra sex zithromax antibiotic azithromycin pregnancy viagra without a doctor prescription what is cipro viagra uk azithromycin three times a week cialis professional daily cialis viagra cialis voucher herbal viagra azithromycin pregnancy category cost of viagra tamoxifen citrate zithromax dosage cialis dosage strengths azithromycin dosage cost of cialis viagra side effects cialis without a doctor’s prescription