Non-US investors haven't enjoyed the same stock rally as Wall Street. Whereas
in gold...
"THE DOLLAR is still driving gold," agree the analysts, pundits and
chart-watchers now scratching their heads about where gold is headed next.
That's kind of true, but not entirely. Yes, the Dollar's fall against gold
since the start of this decade has been greater than the drop suffered to date
by the rest of the world's currencies.
But the last 20% move in Dollar gold prices, for instance - starting from
the mid-July low - has been outpaced by gold adjusted for the greenback's fluctuating
currency value, as measured by the US Dollar Index.
Priced in these "Not Dollars", gold has
risen 26% since midsummer, as this chart (gold for the Dollar price, blue for
the adjusted value, and both starting from Jan. 2000 values) shows.
The reverse is true of the US stock market's big surge, however, because it
started when the Dollar was stronger and set to weaken - rather than the tepid
rally it's put in so far this fall.
Priced in Not Dollars, the S&P has risen by a lower percentage from the
March bottom - up 39% - than its USD value.
In fact, almost one-quarter of the S&P's bounce to date could, if you
so wished, be attributed to the weaker Dollar. Non-US investors have failed
to enjoy the same rally as Wall Street. Whereas in gold,
since it turned sharply higher, they've outperformed - on average - to date.
Formerly City correspondent for The Daily Reckoning in London and head of
editorial at the UK's leading financial advisory for private investors, Adrian
Ash is the head of research at BullionVault,
where you can buy gold today vaulted
in Zurich on $3 spreads and 0.8% dealing fees.
About BullionVault
BullionVault is the secure, low-cost
gold and silver exchange for private investors. It enables you to buy and sell
professional-grade bullion at live prices online, storing your physical property
in market-accredited, non-bank vaults in London, New York and Zurich.
By February 2011, less than six years after launch, more than 21,000 people
from 97 countries used BullionVault,
owning well over 21 tonnes of physical gold (US$940m) and 140 tonnes of physical
silver (US$129m) as their outright property. There is no minimum investment
and users can deal as little as one gram at a time. Each user's unique holding
is proven, each day, by the public reconciliation of client property with formal
bullion-market bar lists.
BullionVault is a full member of
professional trade body the London Bullion Market Association (LBMA). Its innovative
online platform was recognized in 2009 by the UK's prestigious Queen's Awards
for Enterprise. In June 2010, the gold industry's key market-development body
the World Gold Council (www.gold.org) joined
with the internet and technology fund Augmentum Capital, which is backed by
the London listed Rothschild Investment Trust (RIT Capital Partners), in making
an $18.8 million (£12.5m) investment in the business.
Please Note: This article is to inform your thinking, not lead it.
Only you can decide the best place for your money, and any decision you make
will put your money at risk. Information or data included here may have already
been overtaken by events - and must be verified elsewhere - should you choose
to act on it.
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