A Snapshot Of Gold, Silver And The Miners

View from the Observation Deck

1. This post illustrates the wide disparities that often exist between the annual price performance of an ounce of gold bullion, silver, and the equity returns posted by the mining companies.
2. Since precious metals tend to be priced in U.S. dollars, investors should also be aware of the relative strength of the U.S. dollar against other major global currencies, in our opinion. For this reason, we have included the U.S. Dollar Index (DXY) in the table.
3. Precious metals have historically been considered potential inflation hedges by investors, but not so far in 2021, due largely to the strong U.S. dollar, in our opinion (see table).
4. The Consumer Price Index (CPI) stood at 6.2% in October 2021 on a trailing 12-month basis, up from 1.4% at the close of 2020, according to the Bureau of Labor Statistics. From 1926 through October 2021, the CPI rate averaged 3.0%. The CPI rate for November 2021 will be released tomorrow (12/10).
5. Inflation is a growing concern. The number of S&P 500 Index companies mentioning inflation on their Q3'21 earnings call hit a 10-year high, according to data from FactSet. As of 11/12/21, 285 of the 461 companies that had reported…