The Pandemic and Gold, Redux

In our previous episode of Financial Panic (April 2020), we had return rate on Gold since Jun 2016 = 58% (13% per year) return rate on Silver since Jan 2020 = 39% (156% annualized) Using today's metal prices, we have return rate on Gold since Jun 2016 = 66% (13.7% per year)

In our previous episode of Financial Panic (April 2020), we had

return rate on Gold since Jun 2016 = 58% (13% per year)
return rate on Silver since Jan 2020 = 39% (156% annualized)

Using today's metal prices, we have

return rate on Gold since Jun 2016 = 66% (13.7% per year)
return rate on Silver since Jan 2020 = 76% (152% annualized)

So where am I getting these numbers from?

Kitco.com.  I use their current price for one American Gold Eagle (currently $2003) and one American Silver Eagle (currently $31.75).   The real prices are considerably higher than spot prices, which I mostly ignore now.   As the pandemic began, real and spot prices suddenly diverged as physical supply dried up.  For the past two months they were re-merging until July when another sudden divergence began.

1st Panic, ratio of silvers's real price to spot price was ($25 - 18) / 18 = 39%

2nd Panic, ratio is ($32.67 - 22.60) / 22.60 = 45% or about a 10% increase over 1st Panic.

1st Panic, ratio of gold's real price to spot price was ($1900 - 1700) / 1700 = 11.7%

2nd panic, ratio is ($2000 - $1900) / 1900 = 5.6%, which still about twice the normal rate.

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