Gold Shines in Tough Times

Gold Bars
Gold Bars

Regarded as a safe investment, gold often shines during turbulent times when increased demand typically drives up prices. For the first time since last March, gold settled above $1,000 an ounce on Friday. Since its low back in November, when gold was just over $700 an ounce, the bullion has risen 42%. During the same period the S&P 500 has plunged 15%.

Benefiting from the rise in gold prices are the major gold stocks. Take a look at how many of these companies have surged since the bullion’s November low:

Gold Stocks Since November (as of 2/20 close):

  • IAMGOLD (IAG) +132%
  • Yamana Gold (AUY) +105%
  • Harmony Gold Mining (HMY) +97%
  • AngloGold Ashanti (AU) +88%
  • Gold Fields (GFI) +83%
  • Newmont Mining (NEM) +67%
  • Agnico-Eagle (AEM) +64%
  • Barrick Gold (ABX) +58%
  • Compania de Minas Buenaventura (BVN) +50%
  • Goldcorp (GG) +43%
  • Kinross Gold (KGC) +40%

New Lows Abound

As gold has been hitting new highs, the Dow Industrials continues to hit new lows. On Friday, the Dow closed at another new 6+ year low. However, at one point during the day, it looked like it was headed for its lowest close since October 1997. In fact, at the close on Friday, 12 of the index’s 30 components (40% of the index) were hitting new multi-year lows.

Dow Components at New Lows - Worst Level Since...
Alcoa... Sept. 1988
Boeing... Oct. 2003
Bank of America... Oct. 1984
Citigroup... Jan. 1991
Caterpillar... Jun. 2003
DuPont... Apr. 1991
General Electric... Jun. 1995
General Motors... 1946
Johnson & Johnson... Aug 2004
Kraft... ALL TIME LOW (Began trading in 2001)
Pfizer... Jan. 1997
Walt Disney Company... May 2003

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