Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
The 5 Biggest Bubbles In Markets Today - 20th Sep 17
Infographic: The Everything Bubble Is Ready to Pop - 20th Sep 17
Americans Don’t Grasp The Magnitude Of The Looming Pension Tsunami That May Hit Us Within 10 Years - 20th Sep 17
Stock Market Waiting Game... - 20th Sep 17
Precious Metals Sector is on Major Buy Signal - 20th Sep 17
US Equities Destined For Negative Returns In The Next 7 Years - 3 Assets To Invest In Instead - 20th Sep 17
Looking For the Next Big Stock? Look at Design - 20th Sep 17
Self Employed? Understanding Business Insurance - 19th Sep 17
Stock Market Bubble Fortunes - 19th Sep 17
USD/CHF – Verification of Breakout or Further Declines? - 19th Sep 17
Blockchain Tech: Don't Say You Didn't Know - 19th Sep 17
The Fed’s 2% Inflation Target Is Pointless - 19th Sep 17
How To Resolve the Korean Conundrum  - 19th Sep 17
A World Doomed to a Never Ending War - 19th Sep 17
What is Backtesting? And Why You Need Backtesting System? - 19th Sep 17
These Two Articles Debunk The Biggest Financial Nonsense I See In The Media - 18th Sep 17
Bitcoin Price Crash 40% In 3 Days Underlining Gold’s Safe Haven Credentials - 18th Sep 17
The Sum of Risks – Global, Strategic, Political, and Financial - 18th Sep 17
The Netflix Of Canada’s Cannabis Boom - 18th Sep 17
Stock Market Sentiment Speaks: Either You Learn From The Events Of The Past Week, Or You Are Hopeless - 18th Sep 17
SPX 2500 … At Last! - 18th Sep 17
Inflation Lies, Lies and OMG More Lies - 18th Sep 17
How to Choose right Forex Trader? - 18th Sep 17
Who Has Shaped the World the Most? The Dozen Greatest Achievers - 17th Sep 17
Riding the ‘Slide’: Is This What the Next Stocks Bear Market Looks Like? - 17th Sep 17
Gold Up, Markets Fatigued As War Talk Boils Over - 17th Sep 17
Predicting the Future of the U.S. and the World - 16th Sep 17
Deceit in the Financial Food Chain - 16th Sep 17
Gold GLD ETF Investment Resuming - 16th Sep 17
Extreme Weather & Energy Markets: What's Next? - Video - 15th Sep 17
Trump’s Path to IP Wars - 15th Sep 17
GBP USD Approaches Fibonacci Target - 15th Sep 17
Higher US Interest Rates May Force Higher Inflation Rates - 15th Sep 17
Stock Market Investors: Taking the Road "Less Traveled" Has Its Perks - 15th Sep 17
The 3 Best P2P Lending Platforms For Investors In 2017—Detailed Analysis - 15th Sep 17
The US Debt Bubble Will Soon Warrant Serious Measures - 15th Sep 17
Why it is Often Difficult to Sell a House Fast - 15th Sep 17
S&P 500 At New Record High, Will It Break Above 2,500? - 14th Sep 17
Capital Market Trends - 14th Sep 17
Mike Maloney: The Top 10 Reasons I Own Gold and Silver - 14th Sep 17
The Only Real Europe is Greece - 14th Sep 17
7 Security Tips for Online Traders - 14th Sep 17

Market Oracle FREE Newsletter

5 Markets Ready to Move Before Year-End. Eexpert Analysis and New Trading Opportunities

Global Financial Crisis 10 Years On: Gold Rises 100% from $650 to $1,300

Commodities / Gold and Silver 2017 Aug 23, 2017 - 04:47 PM GMT

By: GoldCore

Commodities

– Gold up over 100% in major currencies since financial crisis
– Gold up 100% in dollars, 124% in euros and surged 200% in sterling 
– Gold has outperformed equity, bonds and most assets
– Gold remains an important safe-haven in long term


Gold prices from August 9th 2007  to August 9th 2017

It has been ten years since the global financial crisis began to take hold. At the time few would have known that BNP Paribas’ decision to freeze three hedge funds was the signal for the deepest recession in living memory and a near-collapse of the financial system.

As the French bank blamed a “complete evaporation of liquidity” on its decision the ECB flooded its the market with billions of euros of emergency cash as it worked to prevent a seizure in the financial system.

Very few realised how much the financial and investment landscape was set to change.

In the proceeding decade we have seen unprecedented intervention by central banks which in turn has created a punishing financial landscape for savers and investors.

For those who were unfortunate to experience bank bailouts first hand or a collapse in a housing market, an instant lesson was learnt about the importance of protecting your savings.

That would have been a savvy lesson to learn. Any investors feeling the ripples of the financial crisis and looking to protect their wealth may well have looked to gold as an option. By adding gold to their portfolio they would currently be looking at some extremely healthy returns.

For those who were slower on the uptake of portfolio protection, they still would have benefited from gold’s decade climb and its performance alongside other major asset classes.

Gold’s decade long climb

Gold continues to be dismissed by the mainstream as an important asset-class for investors. However the decade long-climb for the precious metal is example enough of it’s strong performance against a backdrop of financial and political turmoil.

The yellow metal has outperformed a number of key assets and is up at least 100% in major currencies.

Gold price up by over 100% in major currencies

Gold priced in sterling, euro and (US) dollar is up by at least 100%. Gold in a sterling a whopping 200%.

In contrast many major asset classes have not performed to the same extent, or met expectations.

For example, MSCI’s main world equity index might currently be on course for its longest monthly winning streak since 2003, but this is only 22% above levels in 2007.

Plus, as central banks actively stockpiled bonds, yields on 10-year government debt benchmarks have more than halved.

In the decade since the financial crisis gold has been one of the top performing assets. The table below shows the best performing asset classes in the last ten years.

It is clear to see that gold (when priced in sterling) has outperformed the majority of bonds and many equities (when priced in dollar and euro). The precious metal has held its own throughout a decade of financial confusion and distress.

This should come as no surprise to gold investors who are aware of gold’s ability to act as a long-term safe haven during times of crisis.

What is most interesting about the last ten years however is that the mainstream media and politicians are keen to promote the idea that the crisis is over. Yet, in many instances the situation is the same or, arguably, worse.

The financial environment is still an unattractive one for the average investor and saver.

A huge amount of leverage remains in the system, stocks are at unsustainable highs and geopolitical risks grow by the day.

It is clear to see that the global recovery is not the win that so many governments wish us to believe.

Was cash king?

For many savers, the idea of investing in markets following the financial crisis may have seemed too risky. Instead they may have opted to hold cash than they would have previously.

In times of crisis many argue that cash is king. This has certainly been evident in the short-term. However those who decided to hold cash over the last decade, as a form of insurance, will be hurting today.

A saver putting away £5,000 each year into the average UK savings account over the last decade would have only seen their savings grow by a stomach-churning 1.2% to £50,619.

Cash has been significantly devalued thanks to ongoing monetary easing programs by central banks. Savers have also lost out massively due to record low interest rates.

Low interest rates have been good news for borrowers. Rates have been low for so long that we are now faced with a generation of borrowers who have never experienced an interest rate rise.

For the UK we have not see interest rates above 5.5% for over ten years. This is great for those looking to get on the housing ladder or borrow for university but this will not be the norm.

Savers who have already been pushed through low rates may soon see further punishment once rates begin to rise and borrowers can no longer service their debts. How banks will cope is a question few people are able to answer.

Low interest rates are not the only impact from the financial crisis on cash savers. Negative rates are the true issue along with bank bail-ins of which few people are aware.

To see more on how well gold has performed next to cash, see our recent coverage.

Counterparty risk: the only lesson to be learnt

Gold has stood strong and held its own in the face of pumped up asset classes, low interest rates and increased risk. This is largely thanks to its sovereignty in the marketplace.

As we have repeatedly stated gold carries little counterparty risk and serves as a form of financial insurance whilst the walls of both the political and financial system grow increasingly weak.

It is a myth that the worst of the financial crisis is over. The trigger to the collapse may well be different to that which took place a decade ago but the situation is very similar. Gold’s long-term rise and strong performance is not over as sadly the financial and geopolitical crises are still ongoing.

Gold Prices (LBMA AM)

23 Aug: USD 1,286.45, GBP 1,004.33 & EUR 1,091.68 per ounce
22 Aug: USD 1,285.10, GBP 1,000.71 & EUR 1,091.95 per ounce
21 Aug: USD 1,287.60, GBP 999.82 & EUR 1,096.52 per ounce
18 Aug: USD 1,295.25, GBP 1,004.34 & EUR 1,102.65 per ounce
17 Aug: USD 1,285.90, GBP 998.12 & EUR 1,096.74 per ounce
16 Aug: USD 1,270.15, GBP 985.13 & EUR 1,082.29 per ounce
15 Aug: USD 1,274.60, GBP 986.92 & EUR 1,084.05 per ounce

Silver Prices (LBMA)

23 Aug: USD 17.06, GBP 13.32 & EUR 14.48 per ounce
22 Aug: USD 17.02, GBP 13.27 & EUR 14.48 per ounce
21 Aug: USD 17.02, GBP 13.20 & EUR 14.48 per ounce
18 Aug: USD 17.15, GBP 13.30 & EUR 14.60 per ounce
17 Aug: USD 17.02, GBP 13.23 & EUR 14.55 per ounce
16 Aug: USD 16.68, GBP 12.96 & EUR 14.25 per ounce
15 Aug: USD 16.89, GBP 13.12 & EUR 14.38 per ounce

Mark O'Byrne

Executive Director

This update can be found on the GoldCore blog here.

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W http://www.goldcore.com/uk/

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information containd in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife