Much Ado About Noise

goldnews.bullionvault.com / By Adrian Ash / November 30, 2012

Unlike the last 5 years, however, there has been no panic or crash in the broader financial markets in 2012. Indeed, stock markets globally have risen almost as well as gold since New Year.

That breaks a 7-year run of gold beating the US stock market hands down. Gold has only underperformed the S&P500 twice since 1999. It has risen 19.1% per year on average since 2004, versus the US stock market’s 3.8% average rise.

Now, extending that run in 2013 might look a big ask. This year’s return-to-date on gold – some 12.0% according to most data providers – is also flattered by end-2011′s own volatility. (Contrast the PM London Fix from Dec. 29 with the AM Fix on Dec. 30th.) But while the absence of an immediate panic this year has left gold little changed so far, the background rumble of crisis and monetary stress has grown louder. Because the bald fact, like the gold price, remains unchanged too. The fact that countries which cannot repay their debts have only two options – either default or devalue.

READ MORE