Gold Has Served As An Impressive Store Of Value During The Current "Everything Selloff"

9.30.22 - Gold Holds through "Everything Selloff"

Gold last traded at $1,662 an ounce. Silver at $19.05 an ounce.

News Summary: Gold attempted to stabilize Friday factoring in higher rates and safe haven demand. Stocks continued their slide on the final day of a rough quarter.

Forbes--"'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....

There are a number of signs that the global economy could be headed for a recession (or that we're already in one), the most recent of which is that U.S. home prices are in freefall. This week, the Case-Shiller 20-City Index posted its first month-over-month decline in 10 years. Although released this week, the data records prices as of the end of July, meaning home prices may have slipped even further since then....

If it all comes crashing down, I would want to have some gold in my portfolio, which has historically been an attractive store of value when markets cratered."