Gold Up 74% Since Last Market Peak 10 Years Ago

10 year anniversary of pre-Global Financial Crisis market peak in S&P 500 on October 9th

Gold up 74% since the last market peak a decade ago; 11% pa in USD, 9.4% pa in EUR and 12.4% pa in GBP

Precious metal has climbed $736/oz on Oct 9th 2007 to $1278.75 ten-years later

S&P 500’s 102% climb is thanks to asset-pumping policies by central banks, rather than value

Gold’s performance is slowly forcing mainstream to re-consider gold

“Notion of gold as a hedge against serious risk aversion is true… ” – Bloomberg analyst

Ten years ago last week the U.S. stock market hit a peak before crashing during the financial crisis. That now seems a like a distant memory but with stocks making new record highs every day recently, it is prudent to step back and evaluate the long term performance of assets and indeed the outlook in the coming years.

Today the S&P 500 continues to make headlines as it repeatedly reaches new highs, most notably in September as it pushed past 2500 despite North Korean/Trump war drums.

Quietly in the background gold has been putting in its own stellar performance. Although few would have known, given the lack of interest most market participants have paid to it in recent years.

Since the last peak of the S&P500 the precious metal, and ultimate hedge against inflation, has climbed over 74%.

After massive gains during the financial crisis, it fell quite sharply in all currencies in 2013 prior to consolidating at lower levels in 2014 and 2015 and then eking out gains again in 2016 and so far in 2017.

This puts gold in the top five of best performing assets in the last ten years.

In the year-to-date gold has almost been in line with the S&P’s ongoing rally. Both remain in the top 10 performing markets, with an increase of 13.41% and 14.14%, respectively.

Much of the chatter regarding the S&P’s recent performance is surrounded by whispers of concern. Some commentators wonder if equity markets are now entering the ebullient phase that we often see towards the end of bull markets and ahead of market peaks.

This is likely to be the case, but what does this mean for gold which has also had an excellent decade? Many mainstream analysts have been forced to reconsider their take on gold. An asset which, in their opinion, should not have performed so strongly against a backdrop of low inflation and strong, coordinated global growth.

How did the S&P500 recover to such highs?

According to the above chart produced by First Trust, this current bull run in the S&P500 is not particularly remarkable. The average bull market has lasted 9 years with an average cumulative total return of 472%.