For at least a decade precious metals evangelists have blasted every media outlet that the end of the world is coming and that gold and silver are one’s only protection from economic ruin. For years they have single-mindedly recommended Gold, Silver and Mining Stocks as the only investment option without ever considering mainstream investments such as equities and bonds. Well, two years since the great precious metals collapse and many of the gold and silver lemmings have been totally wiped out.
Since it’s high at $1920, gold has fallen by over 35% to below 1200 earlier this year. How’s that for a safe-haven?
Is silver any better? Nope. In fact, silver has fallen by well over 60% from it’s high of $49 to under $20! no safe-haven there either.
The HUI index has also performed abysmally since it’s euphoric highs:
What about other investments?
As this chart shows, other investments such as US equities have outperformed the precious metals significantly over the last few years:
What do the experts say?
So, is the collapse over for gold and silver? The experts don’t seem to think so:
Our forecast, medium term—meaning by 2015—is that gold is going down toward $1,000 an ounce, so from current levels, another 25-30 percent correction could occur.
– Nouriel Roubini, Economist and Gold Expert
Gold hit the channel upper limit at $1,347 where it formed a daily key reversal
– Stephanie Aymes, Analyst at Societe Generale
For years, goldbugs and silverbugs touted their market as a ‘safe-haven’ and a hedge against tail risks. In reality, the tail risk has turned out to be gold, silver and mining stocks themselves. Over the last two years we have seen gold and silver plunge from their highs, decimating portfolios and destroying careers and retirement plans in the process. I wonder if goldbugs and silverbugs will ever apologize to their followers, who have suffered such huge losses in these markets? This tragic event calls for modesty from the gold and silver community, and an admission that equities, not gold, remain the number one asset class for building and preserving wealth over the long term.