The Shiny Golden Rollercoaster

Oh, Gold, our old friend. We posted quite a bit last month about its rapid ascent and subsequent drawback from new all-time highs, but anyone who did not heed our warnings about the yellow metal’s volatility is likely feeling the pain today, with prices down nearly 11% from its all-time high close of $1891.90 on August 22nd. Much of these losses have transpired over the past two weeks, with the August 9th close resting at $1859.50.

DISCLAIMER: PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Why the massive sell-off? Frankly, it’s anyone’s guess at this point. There could be a multitude of contributing factors playing a role. The announcement of Operation: Twist by the Fed earlier this week sent treasuries through the roof, framing them as the “safer” investment for people lusting after stability. This shift in sentiment could be taking its toll on the “sentimental” value of Gold. Others have speculated that selling by banks may be hurting pricing, but with European bank gold sales dipping ever lower, this doesn’t seem to be the case either. Some believe that traders, seeking to cover losses elsewhere, are selling off their big winners- and Gold was in that category for most until recently. But at the end of the day, the why is not necessarily as important as the numbers for investors seeking safe harbor in the storm- and they ain’t pretty.

It’s about more than losses, though. It’s about volatility. From January 3rd to August 31st, Gold’s average daily price range, or percent difference between high and low for the day, was 1.56%. In the past month, the average price range has been nearly double that, at 2.93%. Investors hungry for the barbarous relic need to look beyond flashy ads promising a “safe” investment in gold, and think about whether they can stomach that kind of movement in price.

Bottom line?  Gold is likely not the “flight to safety” investment that people make it out to be. There is no guaranteed return, no matter what anyone tells you, and its rapid price moves are enough to make anyone queasy. Think before you leap.


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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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