You will note that my two books initiated certain chapters with gold, silver and diamond. My daily blog always provides a price for gold. Note that I use toz (troy ounce) instead of oz (ounce) because that is the convention. Simply, if you buy a toz of gold, you will receive 31.1034 grams, while an oz will only give you 28.3495 grams, Thus, the toz will result in almost 10% more gold. So, today, I will review the field of precious metals, and compare it with the Dow Jones Industrial Average.
The three primary precious metals are gold, silver and platinum. You've probably noticed that gold prices have jumped this year. Well, silver and platinum have increased more spectacularly than either gold or the Dow Jones Industrial Average (DJIA):
METAL.......2JAN09......3DEC09.....12DEC09....% INCREASE
Gold..............875..............1218.............1129...............29
Silver............11.08............19.18............17.39..............57
Platinum........926...............1500.............1416...............53
DJIA............9034.................................10471...............16
So the percentage increase of silver is double that of gold. Actually all these metals have dipped since December 3, when gold was at +39%, silver at +73% and platinum at +62%
The above charts are from Global InfoMine. From KITCO, here is what gold has sold for over the past decade.
| Year | Gold,USD/ozt[1] | Silver,USD/ozt[2] | DJIA,USD[3] | World GDP,USD tn[4] | US Debt,USD bn[5] | Trade Weighted US dollar Index[6] |
|---|---|---|---|---|---|---|
| 1970 | 37.4 | 1.6 | 838.9 | 3.3 | 370.1 | |
| 1975 | 140.3 | 4.2 | 852.4 | 6.4 | 533.2 | 33.0442 |
| 1980 | 589.5 | 15.5 | 964.0 | 11.8 | 907.7 | 35.6922 |
| 1985 | 327.0 | 5.8 | 1,546.7 | 13.0 | 1,823.1 | 68.2042 |
| 1990 | 353.4 | 4.2 | 2,633.7 | 22.2 | 3,233.3 | 73.2249 |
| 1995 | 369.6 | 5.1 | 5,117.1 | 29.8 | 4,974.0 | 90.3097 |
| 2000 | 272.7 | 4.6 | 10,786.9 | 31.9 | 5,662.2 | 118.6013 |
| 2005 | 513.0 | 8.8 | 10,717.5 | 45.1 | 8,170.4 | 111.5580 |
| 2008 | 865.0 | 10.8 | 8,776.4 | 54.6 | 10,699.8 | 96.0884 |
You can make whatever you want of it, for this is information overkill, but by just dividing gold into the Dow Jones Industrials, you get the following chart (logarithmic).
You can hardly read it, but the point is that the DJIA has been increasing at a higher rate than gold. 1980 is taken as the 1:1 ratio, and the peak was on 14Jan08, when a 1 (gold):43(DJIA) ratio was attained. So, should you invest in gold, anyway? Click on the Contrarian Investors' Journal.
World markets almost all went up, with the Japan Nikkei now at 10108 (which has risen about 12% this year). Crude oil finally dipped below $70/barrel, ending today at $69.65.
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