Gold performance at an average of 9.5 per cent for 20 years

At an average of 8.8 per cent, the inflation rate in the eurozone is currently very high. Germany, where inflation is in line with the European average, is seeing the highest price increase in almost 50 years. The function of gold as an effective hedge against inflation is regarded with scepticism by many, due to its rather sideways price development for months. This view, however, has been proven wrong: gold is a reliable store of value in the long term – which its 2022 development has thus far reconfirmed.

Significant gains since the introduction of the common currency

The last 20 years recorded an average performance of gold in euro of 9.5 per cent, which is clearly above the inflation rates in the eurozone. Performance would have been even more impressive if the gold price had not fallen by 31 per cent in 2013, partly in reaction to the ECB’s massive bond-buying programme. Overall, the precious metal’s performance was very positive for 15 out of the last 20 years, with annual price increases of up to 38 per cent, offering further proof of the fact that gold investors are well advised to focus on a longer investment horizon.

In 2022, gold performed better than perceived by many investors

According to the World Gold Council’s Gold Mid-Year Outlook 2022, gold gained 9.4 per cent in H1 2022, outperforming many other asset classes. Over the same period, the German benchmark index DAX® lost 20.77 per cent, and the NASDAQ 100 as much as 29.9 per cent. The REIT Europe Index, which tracks the performance of the largest European real estate companies, decreased by 19.64 per cent. Cryptocurrencies did not offer an alternative either: Bitcoin, for example, lost a full 55 per cent of its value in the first half of 2022.