A Year to Remember for Gold Investors
It has been a disastrous year for gold prices. The precious metal started the year on weakness and continued to lose momentum at a rapid pace. In fact, gold is set to post its first annual loss in more than a decade. While some gold investors would prefer to forget the terrible performance, it should serve as a reminder that nothing is immune from a selloff.
After hitting all time nominal highs above $1,900 per ounce in 2011, gold is still trying to find a convincing bottom. Over the course of only two days in April, gold plunged $200 to reach its lowest level in more than two years. In the process, gold logged its worst one-day percentage drop since 1980, and the largest fall in dollar terms on record. On a technical basis, the precious metal reached its most oversold reading since at least 1975.
Through the first eleven months of 2013, gold dropped nearly 25 percent. Silver, often considered to be gold’s little brother, fell about 33 percent. Last month, gold fell 5.5 percent to suffer its worst November performance in 35 years. In comparison, November is historically a strong month of gains for gold. The miners have done even worse. Shares of the Market Vectors Gold Miners Index ETF (NYSEARCA:GDX) have crashed 55 percent year-to-date while the Market Vectors Jr. Gold Miners ETF (NYSEARCA:GDXJ) is down 63 percent. Barrick Gold (NYSE:ABX), the world’s largest gold producer, has been a constant reminder to investors of just how much can go wrong in the mining industry.