The last few weeks have seen more knockdowns to the gold price than anyone can be comfortable with. What’s worse is no one can see a clear explanation. The truth is no-one really knows what has upset gold.
Gold price reacted negatively to the latest US GDP data. Based on the third reading of the US real GDP growth, the economy grew at an annual pace of 3.1% in Q3, faster than the economists' estimates of 2.8%, and the prior reading of 2.7%.
The Shwedagon Pagoda is believed to be the world’s oldest pagoda and the holiest Buddhist shrine in Myanmar. Coated with gold and decorated with more than 4,500 diamonds, the temple is believed to be 2,500 years old, but has been rebuilt many times due to earthquakes.
Copper mining has become an especially capital intensive industry – the average capital intensity for a new copper mine in 2000 was between US$4,000-$5,000 to build the capacity to produce a tonne of copper, now capital intensity is north of $10,000/t.
If asked to name the top performing commodity of the past decade, not many would answer silver because of its notorious volatility. Yet, according to Lloyds TSB, silver prices have delivered the best gains since 2002.
If legendary investor Jim Rogers is right, not only is Recession 2013 unavoidable, it's going to be a doozy."Be very worried about 2013 and be very worried about 2014, because that's when the next slowdown comes," Rogers said recently.
Gold and silver have been performing like they both have something to prove. While some may be quick to label their rise as a comeback story, investors should keep in mind that the safe-havens never truly lost their glitter.