Page 31 - Introduction to investing in Gold

Before I give you an idea of how gold has performed in some previous market corrections, I want to clarify what information the charts in this chapter are based on.
The COMEX is the primary futures and options market for trading metals such as gold, silver, copper, and aluminium. COMEX is an abbreviation of the exchange’s full name: The Commodity Exchange Inc. It merged with the New York Mercantile Exchange (NYMEX) in 1994 and became the platform responsible for its metals trading.
I’ve used comparisons of COMEX Gold against The Dow Jones Industrial Average (DJIA), with charts taken from GoldChartsRUs.
The DJIA is a stock market index of 30 prominent companies listed on stock exchanges in the United States. It is one of the oldest and most commonly followed equity indices in the US.
Before you look at these charts, please bear in mind that there is NO perfect hedge for a market correction. But you can stack the odds in your favour.
Here are a few examples of how COMEX Gold has performed in a market correction.
Has it always protected you? No. But I like the odds.
First up is a comparison of gold against the bear market in the Dow in August 2013. As you can see, the Dow went down 5%, and COMEX Gold went up 13%. It’s important to note that the periods are not exactly the same, but it’s clear that gold was going in a different direction from the Index over much of the month.
26