Gold's Steadfast Performance

By: Michael_J_Kosares

Randal Strauss writes: From the end of 2001 ($276.50) to the end of 2009 ($1104.00), gold has exactly quadrupled in value, registering fairly modest and methodical gains each and every year for the past eight years. From any fair-minded assessment, there is certainly nothing frothy or bubbly about its performance of the past year as it compares very typically to the range of these other annual metrics on a percentage basis.

Look at 2002 or 2006, for example, both on a year-end year-on-year performance as well as the gain in the year's average daily price versus that of the prior year. Certainly the prospects for the U.S. dollar bode much worse now (and for the foreseeable future) than they did in either of those earlier solid years for gold and the general economic landscape, and yet gold continued to forge onward and upward along its steady bullish path in subsequent years, yes, even in the context of that relatively comfortable economic period.

Any commentator who mentions "bubble" in the same breath as "gold" in this current environment clearly has an agenda to try to frighten the herd into a retreat back toward a well-defined micromanageable corral where they can all then be more easily fed a steady diet of Wall Street's menu of fabricated and superficial financial products -- bonds, stocks, and derivatives of every imaginable flavor, etc.

And so I say "nuts" to their sordid assortment of scare tactics and myopic vision. Roam free with confidence and with an eye toward the golden horizon my friends.

Randal Strauss
1/6/2010

Footnote: Further evidence of gold's enduringly strong annual character can be found in our graph below. It depicts the day-to-day gold price fluctuations throughout the course of January - December (expressed as the percentage of each day's price change relative to the first trading day) averaged annually for the 39 year time span from 1971 through 2009.

[And here it must be emphasized that the starting year, 1971, was not chosen arbitrarily, but rather because that was the year that the fixed gold price ($35/oz) of the international gold standard was brought to an end, thus beginning the modern era of market-driven gold prices.]

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By Michael J. Kosares
Michael J. Kosares , founder and president
USAGOLD - Centennial Precious Metals, Denver

Michael Kosares has over 30 years experience in the gold business, and is the author of The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold, and numerous magazine and internet articles and essays. He is frequently interviewed in the financial press and is well-known for his on-going commentary on the gold market and its economic, political and financial underpinnings.

Disclaimer: Opinions expressed in commentary e do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. Centennial Precious Metals, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD - Centennial Precious Metals does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.

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