Gold Is Beating the Market for the Month, Quarter, Year and Century

With only one trading day remaining in 2018, I’m pleased to report that the price of gold has so far beaten the S&P 500 Index for the month of December (4.4 percent versus minus 10 percent), the fourth quarter (7.4 percent versus minus 15 percent) and the year (minus 2 percent versus minus 7 percent). Since stocks have stumbled recently, this might not come as such a shock.

What might surprise some of you is that gold has also outperformed the market for the century (344 percent versus 67 percent).

The price of gold has crushed the market so far this century
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What this means is that, even though the yellow metal is still down from its 2011 peak, it has proven itself as a valuable diversifier in most any investor’s portfolio. And if stocks are headed for another big pullback next year, it could become even more valuable.

Looking back over the past 12 months, I’m not surprised to see that my five most popular and widely shared posts of 2018 involve gold (with one exception). Below I count them down, beginning with a story about Texas, the home state of U.S. Global Investors.

5. Texas Gold Investors Just Got Their Own Fort Knox

The Texas Bullion Depository, the first of its kind in the U.S., officially opened to the public in Austin in early June, capping three years of planning and construction. At the time, Texans were able to deposit their gold and other precious metals at an already-existing facility. Earlier this month, though, officials broke ground on a new, state-of-the-art, 40,000-square-foot facility in Leander, Texas, just north of Austin.

The Texas bullion depository is the first in the nation

This is wonderful news. Because Texas is such a trend-setting state, it might encourage other states to look into creating their own depositories. It also has the potential to attract even more investors to precious metals, which I believe are crucial components of any well-diversified portfolio.

4. It’s Time for Contrarians to Get Bullish on Gold

For most of 2018, the gold bears were large and in charge, with hedge funds shorting the yellow metal in record numbers this past summer. A major contributor to this is gold’s negative correlation to the U.S. dollar, which was strong relative to other major world currencies throughout the year.

A bottom in gold prices looked especially likely after Vanguard, the world’s largest mutual fund company, announced it was closing its precious metals and mining fund. Back in 2001, when gold had similarly found a bottom, Vanguard dropped the word “gold” from what was then the Gold and Precious Metals Fund, and the change coincided with a decade-long precious metals bull run.

Does Vanguards latest fund name change mean gold has found a bottom
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So could this mean another bull run is in the works? No one can say for sure, of course, but the timing of Vanguard’s announcement was certainly interesting. Now that gold is trading above $1,280 again for the first time since June, my confidence that the metal is set for a huge breakout has only grown stronger.

3. Here’s How We Discovered This Disruptive Gold Stock Before It Went Public

Mene jewelry

Photo courtesy of Menë

In November I shared with you one of my favorite new precious metal jewelry companies—Menë. You might not be familiar with the name yet, but you could be soon enough. In its first 10 months of operation, Menë did as much as $7 million in sales, and in more than 53 countries, as of October.