Another good year for gold

Gold prices rose in 2011 for a 12th consecutive year.

It started the year at $1,388.50 a troy ounce on the London Fix at the close of business Jan. 4, 2011, according to historical data at the Kitco website, www.kitco.com.

Gold ended the year at $1,574.50 on Dec. 30. During the 12 months in between, it hit a high of $1,895 at the close of business Sept. 6, while dropping to a low of $1,324 on Jan. 25.

Silver started the year strong at $30.67, hit a high of $48.70 on April 28, hit a low of $26.68 on Jan. 28 and ended the year at $28.18. Silver ended 2011 lower than it ended 2010 for only the third annual decline over the past 12 years.

To get a better handle on just how various financial assets have performed, Table 1 depicts how selected ones did during 2011, and also from that point in time, Dec. 31, 1999, when the world did not come to an end from catastrophic computer breakdowns at the start of the new millennium.

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These assets include some popularly traded numismatic items.

The U.S. Dollar Index performed comparatively well in 2011. However, that masks a continuing long-term decline of the value of the U.S. dollar. Table 2 shows how the dollar has performed over the past 12 years against a number of currencies.

As you can see, only the U.S. dollar’s performance versus the British pound was significantly better. The dollar fell against other what used to be called major trading currencies that are used to calculate the Dollar Index.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at CoinUpdate (http://www.coinupdate.com). He also writes a bi-monthly column on collectibles for The Greater Lansing Business Monthly (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://1320wils.com).