MK note: If 2016 was such a bad year for gold, how is it that through the third quarter, physical gold investment demand posted its fourth best year on record? (Top chart) How is it, too, that demand at the gold ETFs and mutual funds, a favorite measuring stick for the mainstream media, was up a solid 11 million ounces, or 15%+ on the year even after the strong third and fourth quarter draw downs? (Bottom chart)
As of this posting, gold is up 7% on the year despite the late year sell-off. The Dow Jones Industrial Average, amidst a media frenzy, is up 12.5%. That 7% gain, assuming the market holds at this level, along with the charts below represents the rest of the story on gold’s year. It wasn’t the best year on record, but, after all is said and done, it wasn’t all that bad either. With yield instruments paying precious little, that 7% return looks pretty good from a wealth management point of view.
One final point: Since January, 2007 (the first year of the financial crisis), the Dow is up 60%, and gold is up 78%. As you can see from the chart, demand went to a whole new level post-crisis and stayed there. This year’s resurgence under relatively benign economic circumstances is worth noting.
