PART 1.
I'm not usually a patient investor.
But I've exercised uncharacteristic patience in the last 7 months or so...
Buying dips and taking profits on peaks has allowed me to come out of this more or less even.
But let's have a closer look at what's actually happened, particularly compared to the USD...
Keeping in mind that Gold is priced in USD and should have an inverse correlation...
For H2 2020 (Jul 1 - Dec 31):
Gold opens @ $1809
And closes @ $1895
= 4.75% gain
USD opens @ 97.19
And closes @ 89.89
= 7.5% loss
Now compare from early August highs to NOW.
Gold: 2089 down to 1815.
= 13% loss
USD: 93.98 down to 90.97
= 3.2% loss
So at best, Gold underperformed it's expected relationship with USD.
At worst, it REALLY underperformed!
PART 2.
The broader sharemarket has up until recently also had a very tight inverse correlation to the USD.
But this has deviated in the last month or so.
And historically, the US sharemarket has frequently RISEN with USD strength, for several reasons. Not the least being that foreign investors need to buy US Dollars to buy US stocks.
SO...
1. Shares can go up whether USD is up or down.
2. Gold only goes up (and possibly weakly) when USD is down.
3. Gold will probably still drop if the sharemarket does.
4. Investors now seem to think that Bitcoin is the 'new Gold' - a store of wealth and a 'safe-haven'.
(I disagree with this completely:
You can be certain that if the sharemarket tanks... Bitcoin, Buttcoin, B!tchcoin, or whatever other crypto you hold will tank right along with it!)
But the sentiment has nonetheless driven funds out of Gold... and into Bitcoin and other crypto.
So that's the investing reality for now.
Put all that together, and this is why I exited Gold (and Gold miners).
And of course now that I'm out, Gold will probably stage a recovery and go back to all time highs!
