Gold Has Served As An Impressive Store Of Value During The Current “Everything Selloff”
“Gold is no longer a safe haven.” “Gold isn’t an effective hedge against inflation.” “Gold is dead.”
You may have heard and read these comments, and others like it, numerous times over the course of the recent “everything selloff.” This is staggeringly shortsighted to me. Gold is down only around 9.5% for the year, despite surging bond yields, and despite the U.S. dollar being at its strongest level ever relative to other major currencies.
Given these incredible headwinds, you would expect gold to have lost far more of its value than it has. But compared to other assets, from stocks to bonds to digital currencies, the yellow metal has been remarkably resilient.
And that’s gold priced in the U.S. dollar. When we price it in other world currencies, gold has done even better since many currencies have declined significantly in value relative to the greenback. This week, the British pound sterling fell to an all-time low against the dollar, as did the Chinese renminbi.
Of the various gold prices shown below, only two—those priced in the dollar and Brazilian real—were negative for the year as of September 27. The others, including gold priced in the Canadian dollar, were positive.
Many Turks Favor Gold, According To Survey
Perhaps 2022’s best gold performance has occurred in Turkey, where the lira has fallen some 52% on jaw-dropping annual inflation of 80%. Gold has doubled in price since the start of the year, helping foresighted investors protect their wealth against runaway consumer prices. Turks have traditionally invested in the precious metal, and many still prefer it as a store of value, according to a May survey by Areda Survey. Nearly 43% of those surveyed said they consider gold to be the best form of investment.