In a recent update to our clients, we shared some commentary on our thoughts about precious metals in 2013. With precious metals being a commodity that is often traded, we also wanted to share some of this commentary with our blog readers.
So where has the love for gold gone? Over the past couple of months, there has been little talk about gold as fiscal issues and market resiliency have stolen the headlines.
The darling investment that sports a shiny shade seems to have lost a bit of its luster. Since October 4th, gold has lost 8.41% while investors have moved to riskier assets resulting in the S&P advancing 3.87%. But this loss of love for gold doesn’t just date back for a few months. In 2012, gold fell 5.23%, while equity markets were up 13.06%.
The recent turn on gold doesn’t necessarily scream “bear market” but it has seemed to reign in those gold bulls which saw the commodity on an infinite path higher. This again brings sense back to investors and is yet another example of investing 101. Investments don’t go up forever and they also don’t go down forever; investing is a game of cycles.
Since gold has touched a peak of 1908 in the summer of 2011, we have seen the commodity decline 13.60%, with some spurts of glory along the way. But as the once-anointed best investment has seemingly shown its signs of reality, we now ask ourselves what other commodity investments may provide better opportunity today.
So what’s the “new” gold? Platinum. Our team recently identified platinum, which has also received some publicity over the recent weeks and this has been coupled with a great recent performance. Year-to-date platinum is up 11.35%.
Some of the technical indicators, along with some macroeconomic themes, point to tailwinds for platinum.