by Paul Wong
Markets experienced the first post-COVID meaningful correction in September as investment fund exposures were reduced, resulting in a contraction in market depth and liquidity. Despite September’s profit-taking, gold bullion posted its eighth straight quarterly gain. We see this as a buying opportunity for precious metals investors. My colleague John Hathaway, Senior Portfolio Manager, recommends: “Avoid getting caught up in short-term timing decisions; gold pullbacks should be bought.”
September proved less sanguine than August when gold bullion broke out above $2,000 to reach a new all-time high. Although gold bullion fell 4.17% for the month, it is up 24.29% YTD through September 30, 2020, and 28.07% YOY. Both silver bullion and gold mining equities pulled back in September after reaching multi-year highs in August. Despite this, gold mining equities (SGDM)2 have gained 33.43% YTD and 46.22% YOY as of September 30. This compares to 5.57% YTD and 15.05% YOY returns for the S&P 500 TR Index.5 Silver bullion6 is up 30.15% YTD and 36.71% YOY as of September 30.