Welcome to SurvivalBlog’s Precious Metals Month in Review, where we take a look at “the month that was” in precious metals. Each month, we cover gold’s performance, and the factors that affected gold prices.
I’d like to start this month’s column by just saying “Wow.”
What Did Gold Do in March?
Spot gold ended February on a down note, falling $58 to end at $1,585 an ounce. This wiped out most of gold’s gains for the month.
The second week of March saw gold prices get crushed, as investors sold anything and everything possible to meet margin calls on their stock holdings. Some in the media proclaimed that the week’s heavy selloff of gold “proved” that it was no longer a safe haven.
Those who remembered the global stock crash of 2008 – 2009 knew that gold was doing exactly what it was supposed to be doing – acting as “disaster insurance” for investors’ equity holdings. Those people who had bought gold beforehand fared much better than the lemmings who went all-in on equities at the market top.
Gold recovered from the selloff rather swiftly, although it took silver and the other metals longer to catch up. The virus-induced freeze on factories and heavy industries was especially bad news for platinum and palladium. Meanwhile, silver slumped to an 11-year low of $11.94 per troy ounce before rebounding.
To put the level of volatile trading into perspective: gold futures saw their largest-ever loss in a single day – down almost $75 on March 13 – followed by the biggest single-day gains on record, adding $83 on March 23 and another $93 on March 24.
By month’s end, the yellow metal had cooled off somewhat but still hovered just below $1,600 an ounce.
What Is Different About This Crash?
Experts are saying don’t make the same mistake the talking heads on the news are making. Look to 1929 instead of 2008 to see how the current crash may play out. The 2008 crash was caused by big banks gambling with other people’s money. It’s right there in the name: “The Global Financial Crisis.”
This time the cause of the crash came from an outside source, an infectious virus that shut down all economic activity. The meltdown in markets has happened far faster in 2020 than it did in the last crisis. At one point all of the stock market’s gains since President Trump was inaugurated three years ago were vaporized in a matter of weeks.Continue reading“March 2020 in Precious Metals, by Stephen Cochran”
