Two Milestones for Gold

December 18, 2008

In the past week, gold quietly marked two important milestones.

First, as of Monday the price of gold is now showing a gain for the year. The closing price of gold on December 31, 2007 was $833.75. The price of gold today is $854.60.  That makes gold up 2.5% for the year to date. If gold can hang onto this gain into the end of the year, this will also mark the eighth year in a row that gold has had a positive return. For the year and for this decade, gold has humbled its naysayers and rewarded its investors.

Second, on Tuesday the price of gold exceeded the price of platinum. The two metals now trade within a few dollars of each other with gold at $854.60 and platinum at $858. This is a big change from earlier in the year when platinum was trading over $2,200 per ounce, more than double the price of gold. If I'm not mistaken, the price of platinum has been higher than the price of gold for this entire decade. Not since the 1990's has gold been more expensive than platinum. Considering that platinum is thirty times scarcer than gold, this makes a strong statement about the demand for gold.

Comments

By Hal on December 18th, 2008 at 5:53 pm

Yeah, that news about gold and platinum is amazing and may mean that platinum is a good buy right now if this is it’s bottom. Though I’m not so sure it is the bottom. It’s not really a money metal. Not like gold and silver. It’s so tied to production in automobiles and that’s why it’s trading low right now and will likely go lower because of the big problems this industry faces.

Of course with gold and silver being both “money” in the old sense of the word a lot of people are turning there to for some future security.

By admin on December 18th, 2008 at 6:14 pm

I actually picked up some platinum coins recently.

Some of the Platinum Eagles have low mintages that allow the numismatic value to prop up the prices, even when platinum falls.

Not calling a bottom for platinum, but it looks interesting at this level.

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