It seemed like nothing could stanch the flow assets pouring out of gold this past year. As equities rallied and saw new high after new high, gold took a beating as investors flocked to a more lucrative corner of the market. Slowly but surely, however, gold has pulled itself from the depths and was able to break through a key resistance at $1,336/oz. last week. Now, the precious metal sits at a key turning point, as it tries to establish a definitive upward trajectory for the remainder of 2014 [for more gold news and analysis subscribe to our free newsletter].
After enjoying a relentless bull run that lasted 12 consecutive years, gold finally broke in 2013. Having become a darling of the investing world for most of the prior decade, gold’s almost 30% losses hit especially hard, as the precious metal finally saw a correction. The downward spiral was brought on largely by a massive year for equities, as the S&P 500 saw its best annual return since 1997, prompting many to flee metals markets to try their luck with white-hot equities [for more gold news and analysis subscribe to our free newsletter].
The Diwali holiday traditions in India are often marked by healthy gold purchases and increased use of the precious metal. The demand that India typically holds this time of year often offers a boost for gold prices, as citizens and jewelers across the country scoop up the commodity left and right. This year’s Diwali season, however, painted a much different picture as purchases and interest in the metal were quite muted [for more gold news and analysis subscribe to our free newsletter].
Gold has been one of the most polarizing assets of the past decade as it enjoyed a rare 12-year bull run. Barring a borderline miracle, it looks like gold will snap its winning streak in 2013 as the precious metal has hit a wall and has failed to find any kind of positive momentum. While the yellow commodity has been sputtering for months, a number of investors have been holding onto their positions, growing more frustrated by the day as the metal has shown little signs of turning around [for more gold news and analysis subscribe to our free newsletter].
Gold has been steadily declining for the past year, as the precious metal looks like it will finally end its 12-year bull run. Part of its demise stemmed from equities rallying, causing a major increase in risk appetite and an asset class shift for many. Others stipulate that it is simply a natural correction preceding a run higher. Lately, however, gold has been feeling pressure from India as the emerging economy has been frustrating traders around the world [for more gold news and analysis subscribe to our free newsletter].
After 12 long years of being the darling commodity, gold is finally showing signs of mortality, as the precious metal has lost more than 20% in 2013. Though many felt the bull run, which included a dozen consecutive winning years, would continue with the Fed’s easing policy, the metal has finally succumb to the pressures around it. While many continue to try and pinpoint the reason behind gold’s steep drop, commodity legend Jim Rogers points the blame to a popular emerging market [for more gold news and analysis subscribe to our free newsletter].
The old adage “history repeats itself” has been applied to all facets of the investing world, but it’s especially apparent in the commodity world. With most assets displaying cyclical returns and seasonality, the history of many commodities is bound to repeat itself the following year. When it comes to gold, Peter Schiff believes that the phrase points the path to a major run up in gold that few investors will be counting on [for more gold news and analysis subscribe to our free newsletter].
As the decade opened, precious metals (namely gold) were among the most popular commodities for long-term investors. Many had grown comfortable with the commodities as safe haven assets that would help to protect their portfolios from inflation and any unforeseen market dips. But Ben Bernanke may have let the air out of the precious metals world when he announced that the Fed would begin tapering its bond purchasing late this year or in early 2014 [for more precious metals news and analysis subscribe to our free newsletter].
UPDATE: Including the 6/20 sell-off, Paulson’s GLD position has lost more than $800 million as GLD sank well below $125. It has been a rough couple of months for gold bugs. With the precious metal slowly declining in price since the start of 2013, April’s nose dive has driven many investors out of the commodity once considered a “safe haven.” Down nearly 17% this year and almost 30% from September 2011 highs, the best years of gold investing seem behind us. What was once thought of as a darling of the commodity space is now an asset that has destroyed a number of portfolios in recent years, and even fooled a few famous traders [for more commodity news and analysis subscribe to our free newsletter].
Legendary commodity investor Jim Rogers has never been shy about vocalizing his opinions about the investing world. In particular, Rogers has an affinity for commodities like ags and precious metals. Gold has been one of the most talked about hard assets of the last two years, as the metal soared to all-time highs, only to watch its price take a tumble in the months that followed. All along the way, Rogers had been calling for a correction for gold, and it is a sentiment that he still holds today [for more gold news and analysis subscribe to our free newsletter].