When equity market investment charts turn south, the
promotional drums always beat a positive clamor about the
merits of precious metals – some well founded, some not.
In downturns, gold remains relatively strong overall as do
most other precious metals.
To better understand gold’s relative psychological strength,
take gold’s support base, for example; the U.S. Treasury
holds about 4,578 metric tons at Fort Knox, some 368,000
standard, 400 oz. troy gold bars, about 3 percent of all the
gold ever produced. The amount is second only to the
Federal Reserve Bank of New York's vault in Manhattan,
which holds 7,000 metric tons (7,716 tons) of gold bullion.
Such off icial holdings tend to add to the reputation of gold as
a solid investment.
Like the stock market, gold trades up or down, depending on
the whims of fortune and our perception of the economy.
Gold sold for about $400 an ounce in the year 2000, peaked
at $1,900 in 2011-12, and was seen hovering around $1,180
in late October 2014. The one sure thing about gold and
other precious metals – when other markets correct, the
people who push gold for a living will inundate the media
with stories of gold as a safe haven. They are well organized
and generally quite credible.