Gold

Gold

Nickname
Midas Metal
Parent Asset Class

Gold is a precious metal that is commonly considered the purest form of money

Gold

Book

2014


Reasons to Own Gold
  • It provides and option on the unexpected (typically goes up during crisis)
  • Can provides protection from adverse monetary and credit events
  • Can provide protection from low, negative or otherwise artificially low rates
  • Gold tends to preserve wealth and value over time
  • Has been used by multiple civilizations over Millenia
  • Consider to be a "crisis currency" - retains value when other markets are in a crisis
  • Gold is an investment in failed monetary policies (monetary disorder)

Negative Aspects of Gold (What Gold Bears Say)

Gold Price
There are many gold price drivers that all reflexively interact
Another Way to Think About Gold
  • People usually think about gold as to how much it is worth in their home currency
  • Instead, investors may want to think of gold in terms of physical quantity
    • This gives gold the priority instead of the US dollar
    • Helps remove worries about the ups and downs gold has with currency changes
    • At the end of the day, the physical amount of gold you have is most important\
  • Example: Instead of thinking that you have $1,000 worth of gold in US dollars, think that you have 1 ouce of gold out of a slowly growing world supply
Major Gold Purchasers

Gold Characteristics (that make it valuable and a good form of money):

Fun Gold Facts:

Real World Gold Lessons
  • The gold from shipwrecks that took place hundreds or thousands of years ago is still very very valuable and coveted.  What other asset could hold it's value like that while under the ocean for hundreds of years?

Ways to Hold Gold

There are multiple ways one can hold gold an asset:

  • Purchase and store coins/bars at home
  • Purchase and store coins/bars with third party vaults
  • Invest in ETFs, Funds and Trusts that hold gold (allocated or un-allocated)
  • Etc, etc. etc.

Gold During Equity Bear Markets


2011 - 2015 Gold Bear Market

  • Began in Sep 2011 with gold at $1,900 per ounce
  • Ended in Dec 2015 with gold at $1,050 per ounce
  • One of the biggest drops in gold price (over a short time)
  • May be a "correction" in a longer-term bull market


1980 - 1999 Gold Bear Market

  • Price dropped from $800 per ounce to $200 per ounce over 20 years
  • Some minor rallies in the middle

Gold Production Levels

  • New gold deposit finds are becoming rare (2018)
  • Gold mining output has been relatively flat the last few years (2016 - 2018)


Gold & Central Bankers