My Gold Benchmark

Every year right around February, which happens to be my birthday month, I like to engage my obsession and look at how gold prices are doing. My base year happens to be 2008 as this is when I can clearly remember having studied and understood how gold works. It also happens to have been the year I started appreciating the Austrian school of economic thinking.

For four years now, this exercise has been quite the exciting one and I can only wish I had some physical gold to have been experimenting with. In February 2008, gold traded at around $900 an ounce and finishing at around $960. In February of 2009, gold fluctuated at from around $900 to finish at a higher $980. In February of 2010 the same ounce would go for around $1080-1110 thereabouts. February of 2011 saw the same upward trend being withheld with gold trading at $1330-1400. This year’s February saw a gold ounce that traded for between $1740 and $1770.

If I’d bought 100 units of gold at $900 in the February of 2009 the same would be worth $177,000 bringing in a profit of $87,000 minus transactional costs. I wonder how many portfolios out there Australian or international can return such an amount over four years.

Until next year, I say watch that ounce.