Blast From The Not Too Distant Past: Gold (Circa August 30, 2013)

Back around August 30, 2013 for the sake of curiosity I bought one ounce of Gold. Taking the US Dollar (USD) benchmark price from them cost around $1412.90USD while the Canadian to US (CADUSD) exchange rate was 0.94993. This meant purely from exchange it cost $1487.37CAD per ounce of Gold. To calculate this take the cost of gold in USD and divide by CAD USD: $1412.90USD/0.94993 = $1487.37CAD

Fast forward to January 29, 2016 and gold slid -$296.80USD (-21%) to $1,116.10USD. This was a terrible loss, but look at this: CADUSD tumbled -0.23443 (-24.67%) to 0.7155. Taking the same calculation above for the CAD price of gold: $1,116.10USD/0.7155CADUSD = $1559.888CAD. That is RIGHT. The cost per ounce of gold in CAD since August 30, 2013 actually INCREASED $72.518CAD (4.8755%) to $1559.888CAD.

The question is whether this was a good investment on my part as the gold provided a meagre 3 year cumulative gain of 4.8755%. Annualized, that is around 1.6251%, which is about the same rate of return from a savings account. However, if you look at gold not purely as an investment, but as "money" or a form of "currency" you've actually done what many have touted it to be: a protection of your purchasing power. In my case, this was because CADUSD crumbled 24.67% since August 30, 2013 reduced what my Canadian Dollar could purchase. Although Gold which is priced in USD tumbled 21% the actual currency of USD increased in value. This in fact protected and increased the value of my ounce of Gold. Truly, this is a curious situation of distracted investing.