Gold Just Broke Another Record
Joe Hill|August 21, 2024
It’s been another banner year for gold bugs.
If you’ll recall…
Last year, the price of gold jumped to more than $2,000 per ounce, breaking through a key psychological level.
It was a historic event.
But with that milestone in the rear view… gold has kept on climbing. And this week, it hit a new all-time high of $2,500 per ounce.
That amounts to a more than 40% gain over the past two years.
Now, I understand that 40% in two years may seem paltry compared to the gains of, say, Nvidia (NVDA). But remember… we’re talking about gold here.
The recent action is far from the historical norm.
Since 1971, gold’s average annual return has been around 8%.
In a typical year, its performance doesn’t come close to that of the stock market.
But over the past two years? They’ve practically been in a dead heat. In fact…
If we look back exactly two years – to the day – gold is beating the S&P 500.
In a continuation of the “everything is up” phenomenon we took note of in June, gold and stocks (and, recently, crypto) are all trending up in anticipation of that all-but-guaranteed September rate cut.
Right now, markets are expecting a 25-basis point cut. If the Fed surprises with a 50-basis point cut, it could really send things into overdrive.
But that’s not the only thing driving gold prices higher.
Gold stands apart from stocks in one crucial way… and that’s its longstanding role as a crisis hedge.
There’s a reason why gloom-and-doomers love gold. And I don’t know if you’ve looked around lately, but… there’s an awful lot to be gloomy and doomy about.
For starters, this is an uncommon election year with new bombshells being released every day. And let’s not forget the multiple high-stakes conflicts happening across the pond.
The economy, for its part, seems like it may actually sidestep a recession. But who knows for sure? It was only two weeks ago that outlets were publishing headlines like this:
So…
In a contentious election year… faced with an uncertain economy… and an even more uncertain geopolitical environment…
Is it any wonder folks are piling into gold?
Or perhaps the better question is…
Just how high will gold prices go from here?
We’ll be keeping a close eye on them in the days and weeks ahead.
