Gold Tumbles as People Lose Faith

Remember all the TV and radio commercials over the past 4 years saying, "Buy gold!  With massive money printing it's ALWAYS been a safe harbor to protect your wealth!"

Well, for 2013 they sure were wrong!  If you had left your money in the bank earning NOTHING you would be way ahead of the folks who bought gold.

Gold Caps Biggest Annual Rout Since ’81 as Investors Lose Faith

Gold futures, which reached a six-month low today, posted the biggest annual slump in three decades as an improving economy cut demand for wealth protection. Silver touched the lowest since July.

Bullion futures for February delivery fell 0.1 percent to settle at $1,202.30 an ounce at 1:39 p.m. on the Comex in New York, after touching $1,181.40, the lowest since June 28. Prices fell 28 percent this year. Investors lost faith in the metal as a store of value as equities rallied and an economic recovery prompted the Federal Reserve to pare its $85 billion in monthly bond purchases. Silver dropped 36 percent in 2013 to $19.37 an ounce, the biggest annual drop since 1981.

Assets in exchange-traded products backed by gold fell 33 percent to the lowest since 2009 amid sales by billionaires George Soros and John Paulson. Disposals of 867.8 metric tons in 2013 were more than the combined inflows in the prior three years, data compiled by Bloomberg show. The Standard & Poor’s 500 Index of shares climbed 29 percent and is set for its best year since 1997, while the International Monetary Fund signaled this month the U.S. economy will expand more than forecast.

Physical demand, most notably from China, may help stem the potential for further losses, James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note yesterday. The drop below $1,200 this month boosted Chinese demand, he said.

Jeffrey Currie, Goldman Sachs Group Inc.’s head of commodities research, said Oct. 8 that gold is a “slam dunk” sell for next year as an improving U.S. economy reduces the need for the metal as a store of value.  

There’s a “much stronger outlook” for U.S. growth in 2014, IMF Managing Director Christine Lagarde said in an interview broadcast Dec. 22 on NBC’s “Meet the Press.” Growth may accelerate to 2.6 percent next year from 1.7 percent in 2013, according to economist estimates compiled by Bloomberg.

Here;  http://www.bloomberg.com/news/2013-12-31/gold-with-silver-heading-for-worst-decline-in-three-decades.html?cmpid=

You see, as people were losing faith in Wall Street and the stock market for the past 4 years, they loaded up on gold...but as the Fed kept printing money they eventually succeeded in shoving the stock market higher and since inflation has been kept out of the news...gold started to tank.

So if you had put $10,000 dollars in your favorite S & P Index Fund on January 1, you would open your statement today and probably see that it is worth about $13,000...but if you had put your $10,000 in gold it would be worth about $6700 as of today.  That means your S & P investment is almost worth 100% MORE in one year!!!

OUCH!!  Glad I didn't listen to the GOLD GUYS schlepping gold on TV every 30 seconds!!

Remember, by the time people start schlepping stuff on TV...it's usually too late to invest.  The smart money was already in that sector long ago and now it's just all the Oprah watchers who are getting their advice from a TV that are going to hog pile in...and probably lose their money.

So for 2013 it seems the money magicians of the world's central banks are the heroes!!  They printing paper money at a rate faster than EVER and all the world seems to have fallen for that ruse....for now.

The Bible is VERY clear that your gold and silver will not save you from the wrath of God.  So as the signs increase that point to the nearness of the coming wrath, we can guess that at some point lots of godless folks are going to hog-pile into gold...probably when the entire paper money system collapses.

So now it's 2014.  It's always easy to look BACK at what happened last year...the real test is to look forward and ponder whether paper money, stocks, gold, banks, inflation, deflation, oil, corn, cattle, real estate or some other segment will be the next thing that goes up 30% this year....or collapses this year.

Proverbs tells us that the fear of the Lord is the beginning of wisdom.  It then goes on to say, "Blessed is the man who finds wisdom, the man who gains understanding, for she is more profitable than silver and yields better returns than gold."  Proverbs 3:13-14

Amen!!

By the way, silver dropped 36% in 2013...so we all would have done better in 2013 seeking The Lord than we would have done by investing in silver and gold.