Gold hits R19000/oz, up 16% this year

It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.
Mark Twain

The pet rock is continuing its upwards trend for the year. It is currently standing at R 19,150/oz, up 16.6% year-to-date (as measured in South African Rands).

I’ve already shared most of my thoughts about Gold (e.g. here and especially here), so for this post I’ll just let the numbers talk for themselves.

The table below shows the price of Gold in South African Rands (ZAR) over the last 30 years, and the returns a saver would have earned had they bought and held Gold over various time periods since then:

Date Price/oz Time Total Return Annualized Return
1 Jan 2016 R 16,406 5.4 weeks 16.6% 343%
8 Feb 2015 R 14,233 1 year 35% 35%
8 Feb 2014 R 13,833 2 years 38% 18%
8 Feb 2011 R 9,852 5 years 94% 14%
8 Feb 2006 R 3,450 10 years 455% 19%
8 Feb 1996 R 1,469 20 years 1204% 14%
8 Feb 1986 R 667 30 years 2771% 12%

I found the quote I added at the top of this post in a movie called The Big Short, directed by Adam McKay, and starring Christian Bale, Steve Carell, Ryan Gosling and Brad Pitt.

McKay managed an amazing feat in that movie: he somehow presented the cause of the 2008 housing market crash, a topic that most people find either too boring or too complicated to understand, in a way that is both entertaining and easy to grasp.

If you haven’t seen it yet, I highly recommend you do.

It only shows the tip of the ice-berg, but if most people were aware of even that much I cannot imagine how the system will remain intact.

In the meantime, for those of you who, like me, have been waiting so long, I believe the time is finally here. Sit tight, avoid counter party risk and enjoy the ride.

 

~ i may be wrong ~ report evil adverts ~
  1. Andre du Plessis

    Hi Francois,

    I have been reading your blog for a couple of years now. I have a question on gold. How can I, a middle-class salary earner invest in gold. I’ve looked up the actual metal bars, but the cost of even one is prohibitive for me to get into. If I look at the 1/10 th of an ounce bars and smaller – the sellers are adding high margins and it seems there is a slight disconnect between the price of gold and the price of these bars.

    Kind regards, André du Plessis

  2. Francois Viljoen

    Hi Andre

    Good question and it deserves a more detailed answer.

    I’ll write a post about the best way to go about buying and saving in precious metals and all the options that are available.

    Kind regards,

    Francois

  3. Veli

    Hi Francois

    I am interested in the article you are about to write on buying and saving in precious metals, I am open to be mentored by you in the subject.

    Veli

  4. Francois Viljoen

    @Veli & Andre:

    My apologies for taking so long; I was very sick the last few weeks so just the most important things were attended to.

    I’m almost done with the article I promised; will hopefully be able to post soon.

    Kind regards
    Francois

  5. Veli

    Hope you are well and looking forward to hearing from you.

    Regards

    Veli

  6. Carl

    @Andre du Plessis

    Dude. in rsa the market has bin cornered, 99% of all markets are run by market manipulators (Oligarchy ). you aint got a snowballs chance in hell, unless ye go with ze flow. Za_inc ain’t a democracy when you trade against the 5 traders that have pensioners proxy, ye forcing a trade if ye do. Buy red wine , drink und wait & monthtrade. In Belize if posible.

    Same with housing market, investing in a city means you take responsibility for outstanding debt , same as sectional title, how many passed their audits? buy there.

  7. Veli

    Hi Francois

    Just thought I do a follow up on the document you are buys with, thanks.

    Regards

    Veli

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