Gold News

Gold Ends 2009 with 27% Annual Gain, 280% Rise for the Decade, as Stocks Drop 23% from 10 Years Ago

Gold rose sharply into the close of 2009 in short London trading on Thursday, adding 1.8% from Wednesday's one-week low as the US Dollar fell on the currency market and global equities ticked higher.

Ending the year with a London Gold Fix of $1104 per ounce, the price of gold in Dollars averaged more than $972 in 2009, adding 11.4% from the 2008 average and rising almost 27% from last New Year's Eve.

Eurozone gold buyers saw the price rise 23% in 2009 from New Year's Eve 2008.

For UK investors choosing to Buy Gold this year, the average daily price of gold rose 31.5% to £621 an ounce. Year-on-year, it gained 14.7%.

London's FTSE100 share index rose 21.8% this year, but the Gold Price delivered average annual gains this decade of 15.1%, while the Footsie dropped more than one-fifth of its value from the record high of Millennium Eve.

US stocks as measured by the S&P 500 index have lost 23% from this time 10 years ago. The Gold Price in Dollars has averaged annual gains of 14.9%, gaining more than 280% from the end of 1999.

"As we move into 2010 it will be interesting to see how the precious metal picture unfolds," says Japanese dealer Mitsui in a note from its London office.

"Investors are expected to jump back on the gold bandwagon in the New Year, after profit-taking and a US Dollar rally have brought the yellow metal back to levels that seem a relative bargain."

Thursday saw the US Dollar fall hard on the forex market, losing more than 3¢ to the British Pound and trading at worse than $1.44 to the European Euro – launched 10 years ago – little changed from the end of 2008.

US government bonds fell as the Dollar slipped, driving the yield offered by 10-year Treasuries up to 3.79%. That compares with a 10-year yield on New Year's Eve '08 of 2.25% and the close of 1999 at 6.45%.

Crude oil meantime crept higher towards $80 per barrel – reversing well over two-thirds of 2008's post-Lehman Bros. losses. Base metals led by copper and zinc ended 2009 at new 15-month highs. White sugar completed its biggest annual rise in more than two decades according to Bloomberg data.

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Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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