Anyone that has owned gold stocks over the last 2 years is probably sick of hearing bull arguments and frustrated seeing the stock’s decline with such severity. This is an indiscriminate gold miner bear market that is now leaving investors confused as ever. But when going through history, it is surprising how common it has been for the gold mining stocks to go through these bear market declines. In the last 40 years there were 6 distinct gold stock declines that wiped out 50-77%.
Despite expectations that gold was headed higher, this weeks sell off in the precious metal is another indication of how economic challenges elsewhere in the world end up affecting investors everywhere. Typically during challenging times precious metals are often seen as a store of value. This simply means that when assets such as stocks, bonds or currencies are unattractive from a risk/reward perspective, investors and money managers migrate over to the shiny metal to hedge against market risk.