Gold and Silver Leave Wall Street in the Dust

Chart of the Week #61

You've probably heard the following adage: precious metals are great in times of crisis—but in "normal" times, you're better off in the stock market.

Well, we just released a silver-focused issue of Crisis Investing, and since we're not exactly living through a financial apocalypse right now, I figured this was the perfect time to test that conventional wisdom.

That’s what this week’s chart — or rather, charts (we’ve got two this time) — is all about. Take a look at the first one showing the performance of gold, silver, and the S&P 500 over the past year.

As you can see, both metals absolutely crushed mainstream stocks. Gold delivered a stellar 38% return over the past 12 months, while silver posted a solid 30%. Meanwhile, the S&P 500 managed a measly 17%.

Stock market aside, what really jumps out to me is how silver has been closing the gap with gold. Gold led most of the year, but silver’s been making up ground over the past two months.

Now, the chart above is a bit crowded, so let's zoom in on year-to-date performance to see this dynamic more clearly.

First, the returns…

Gold is up 25% year-to-date, silver has gained 26%, and the S&P 500? Barely limping along with just 6%. That means precious metals are beating mainstream stocks by a factor of four so far this year. Yes, you read that right — four times the return of the almighty S&P 500.

That’s the big picture — but what about gold versus silver?

Well, take a closer look at the second chart, and you’ll see exactly what I mentioned earlier — silver is starting to close the gap with gold. This could be classic silver action: lag early, surge late, and ultimately blow gold out of the water.

If history is any guide, we may be on the cusp of something similar right now.

When I wrote about all that earlier this week, I said that silver hasn’t blasted past gold just yet — if it had, we’d already be late to the party — but the action is clearly building. And you can see that in the charts above.

Enjoy the rest of your weekend,

Lau Vegys

P.S. As mentioned above, we just released the latest issue of Crisis Investing. It features a silver pick poised to benefit from the metal’s explosive potential — and we’re also locking in some well-earned profits. Our recent rare earths pick has more than doubled, and we walk through exactly what we're doing now.

Even if you're not a paid subscriber, I'd recommend checking out the lead story about why silver and silver stocks still look undervalued despite their recent gains. Some interesting charts in there too.