Gold is at 331.52 Euros, down slightly from 1/2/03!

[jtryka]

We think about gold and how well it's done over the last year, and for the most part we think about it in dollars, after all we are in the US, and gold around the world is traded in terms of dollars, but if you are from outside the US, how well would your gold investment have done?

 

In Europe, gold started the year at 332.14 Euros, and ended the year at 331.52 Euros, down about 0.2%, but certainly a lot worse than if you had just put the Euros in a savings account and earned 1% or 2%. Not such a great performance mainly due to a 20% depreciation in the USD relative to the Euro.

 

In the UK, you did a little better as gold started the year at GBP 215.70 and ended the year at GBP 233.67 or up 8.3%, not too shabby, but certainly not as good as the stock market.

 

In fact, the US or other dollar pegged currencies saw the best performance in the gold price over the year, rising from $343.80 to $416.70, or up 21.2%! But is seems that a good chunk of that rise related more to the weakness of the dollar, and far less was due to strength in gold. That doesn't mean I believe gold is overvalued or the dollar is undervalued, as these moves tend to occur in multi-year cycles. But it does suggest that the solid moves in gold are not nearly as strong outside of the US Dollar zone. Just something to think about.

[jom]

But is seems that a good chunk of that rise related more to the weakness of the dollar, and far less was due to strength in gold

 

Hop on one elevator as it goes up while yours is going down? Hopefully, it won't be the other way around six months from now.

 

jom