In this our last daily news of 2014 we look back at the year that was. 2014 didn’t see the big hit of 2013 but apart from reaching $1530 in March gold bounced between $1350 and $1400 for most of the year finishing a respectable 6.7% up at $1443. Silver wasn’t so kind and basically saw a downward trend all year finishing at $19.23 or 11% down on the year, and the Gold Silver Ratio going from 62 to 75. Palladium was the star performer being 25% up. By comparison the All Ords was up just 0.8% for the year.
It was a year that saw the US end QE3 (Quantitative Easing) but not before they took the Fed’s balance sheet to $4.5t, their total debt over $18t (after the debt ceiling debacle at $17.3t), and lose its place as the world’s largest economy (in real terms) to China. China printed more money than anyone, saw the emergence of real credit bubble symptoms and a slowing economy but at least bought real assets in looking like surpassing even the record 1200t of gold of 2013 again this year. Japan slumped into recession again despite (stimulus on steroids) “Abenomics”, so acted on changing that…. by re-electing Abe…The EU was the star underperformer next to Japan and in desperation looks set to start full scale Abenomics/QE style monetisation because, well, it worked so well there(?). Russia, under attack from both sanctions and the year end plummeting oil price managed to buy no less than 152t of gold and pull off the biggest non USD petro deal with China on its $400b gas deal, a non USD hegemony trend China was perpetuating around the world this year. The world hit some awesome new records including $100t in global debt (far in excess of the GFC), and (according to Bank of America) 56% of global GDP currently supported by zero interest rates, as well as 83% of the free-floating equities, and half of all government bonds in the world yielding less than 1%. Awesome huh? Who needs gold?
India re-emerged as a global giant in gold consumption as government restrictions were eased, looking to reach nearly 900t, as well as emerging as one of the biggest silver consumers too (over 7,400t!). Speaking of silver, the US Mint surpassed last year’s record with over 43m silver eagles sold. All this despite banks and the usual suspects talking down gold and silver as irrelevant in a recovering economy, as you may well do when we saw open interest on COMEX sky high, against these low prices and a mere fraction available for delivery.
As for 2015? Suffice to say all the reasons you probably bought gold and silver are still in place, and then some. Predictions are pointless in this unprecedented global economic experiment and black swans are flocking. Balance (as always) is key to success and security. The beauty is, thanks to said COMEX games, you have the opportunity to pick up gold and silver to balance your wealth at still bargain prices!
The team here at Ainslie Bullion thank you for your business in 2014, wish you a wonderful festive season, a fruitful 2015 and look forward to seeing you then.