Historic

A few minutes ago the price of gold reached a new high in relation to the U.S. dollar. Or, one could be equally accurate to say that the U.S. dollar reached a new low relative to gold. Click for a higher resolution version:

GoldHistory

In the mid to late 1990’s gold was selling for $300/ounce. I was making more money than I am now (contracting work for Microsoft with unlimited amounts of overtime allowed at 1.5X base rate) and bought a few ounces. But most of my money went into paying down the house mortgage and putting a new roof on it. And then half of that, which wasn’t very much to begin with, went to my ex-wife in the divorce. I wish I had bought more now. It would be worth a lot more than what the house appreciation was.

Gold surging is generally an indicator of troubling times which certainly describes 2020. But what is interesting now is that vaccine trials are looking pretty good and the economy is doing okay considering the circumstances. But yet, the price of gold continues to climb. I suspect the huge surge in the “printing” of money is a major contributor.

We live in interesting times. This year will be one for the history books.

8 thoughts on “Historic

  1. Yes, it’s good, but not spectacular when inflation-adjusted.
    https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

    Silver shot up recently, too:
    https://www.kitco.com/charts/livesilver.html
    The 60-day chart gives a better feel for it.
    I’m expecting $3k gold and >$50 silver within a reasonable investment time-frame, possibly within a year if things go seriously sideways.

    On a related note: massive flooding, more rainfall expected, and a literal plague of locusts are hitting China, along with a drought in the north. Many of the storage granaries are in the flood-zone near the rivers. Their farm-land is being harder than their industrial areas so far. Some estimates are they will lose more than half this year’s crops, perhaps as high as 85%. Food prices are going up, especially for bulk staples, unless the famine takes out a half-billion mouths. If the Three Gorges dam fails, that latter is a very real possibility. So then the question is: does China go to war to get out of it’s predicament, or starve silently? That uncertainty will drive metals and manufactured good prices up. WAY up, along with food.

    At this point, if Space Aliens showed up, people would be like “Eh? Whatever. It’s 2020. What’ch’a gonna’ do?”

    • The supply of rare earth metals is also threatened by what’s happening in China.

  2. Platinum and palladium’s behavior has been interesting as well. Neither has the deep history of gold and silver as stores of value, but both are industrially important metals for certain applications like catalysts.

    • Indeed. For a long time, platinum prices were higher than gold, and palladium about half of platinum. About a year or two ago, the two changed places, and platinum has been hovering around 800 while palladium is well above gold. I can’t quite figure out why.
      Meanwhile, on gold prices not changing much after correcting for inflation, that makes sense, that’s another way of saying a gold standard works. I once read that a good quality suit has cost one ounce from the time of the Roman republic to the present day.

  3. Can’t get 2020 into the history books soon enough for me. Had enough of this turmoil for a bit…

    I have to wonder if some of the reason gold is at the high is the civil unrest that is going on – 50+ days in Portland? Some folks must be getting a bit concerned about that.

    If this keeps up, I’m going to have to start watching for 4 guys riding horses…

    • Those four horsemen can sit back on beach chairs drinking exotic cocktails after they subcontract to Man With Rifle, Electrical Grid Map And Visual Recognition Guide For Difficult To Source Un-repairable Infrastructure Components.

      • A few years ago, what may have been a test run of that scenario happened in the San Jose CA area. I don’t remember what the outcome was, but I’ve seen it referred to a few times, so it must have been somewhat effective to still be on peoples radar.

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