Since the 1970s, gold has returned an average 10% per year, comparable to the S&P 500 average price performance. Over the past 10 to 20 years, gold has also held up, supported by important structural changes in the market, like the economic expansion of emerging markets, increased use of gold as part of foreign reserves by central banks and the rising popularity of gold-backed ETFs.
“This ‘stealth rally in gold’ has been enabled by the battered U.S. dollar, says Bespoke Investment Group. The Bloomberg Dollar Spot Index fell in the previous five sessions, its longest losing streak since September,” according to Bloomberg.
Tom Lydon’s clients own shares of GLD.