2012 Outlook For Gold: Positive Fundamentals Remain And Crucial Diversification
1 comment | December 22, 2011 | includes: AGOL, DGL, DGLD, DGP, DGZ, DZZ, GLD, GLL, IAU, PHYS, SGOL, UBG,
With just a few trading days left in 2011, we can take stock of gold’s performance vis-à-vis other assets.
Gold is 13.7% higher in USD, 12% higher in GBP and 14.4% higher in EUR. Gains were seen in all fiat currencies and even stronger performing fiat currencies such as the CNY (yuan) and JPY (+9% and +8.75% respectively).
(Click to enlarge)
G10 and Gold in USD in 2011 (YTD)
Stock markets globally had a torrid year with the S&P500 down 1.3%, the FTSE down 8% and the CAC and DAX down 19% and 15% respectively. Asian stock markets also fell with the Nikkei down 17%, the Hang Seng 20% and the Shanghai SE down 22%.
The MSCI World Index fell 9%.
Thus, gold again acted as a safe haven and protected and preserved wealth over the long term.
While gold reached record nominal highs at $1,915/oz in August, it is important to continually emphasize that gold remains well below the real high, adjusted for inflation, in 1980 of $2,500/oz.
Gold today at $1,625/oz is 18% below the record nominal high of $1915/oz in August 2011. More importantly, gold remains 46% below its real high of $2,500/oz.
Since 2003, we have said that gold would likely reach the real high from 1980 for a variety of important fundamental reasons – such as global debt levels, global demographics and geopolitical, macroeconomic, monetary and systemic risk.
Money Creating Central Banks May Push Gold to New Nominal Record in 2012