Since the onset of 2022, we've witnessed substantial shifts in the dynamics of prominent assets such as gold, stocks, bonds, cryptocurrencies, and fiat currency. Notably, by the close of summer, the euro and the pound sterling reached historic lows against the US dollar, trading at 0.953 euros and 1.0391 pounds to the dollar, respectively. Subsequently, the dollar index followed a predictable trajectory, receding to its August levels.
Exploring the impact of the euro's depreciation on our finances is crucial in this context. Let's delve into the performance of various tools over the past eleven months, examining two intervals: the first ten months (from the year's commencement to November) and the period until the article's composition on November 24. By mid-November, many instruments demonstrated noteworthy developments within the broader economic landscape.
Additionally, we'll touch upon forecasts for the upcoming year, anticipating a continuation of the "exciting times" trend initiated by the savings shutdown two and a half years ago. This trend is driven in part by escalating key interest rates, intensifying the pressure on savings amidst elevated inflation. Anticipated consequences include a notable deceleration in the real economies of the US and Western Europe, as previously discussed in an article on the imminent crisis in Europe.
Turning our attention to investment gold, its journey began with a value of $1,801 per troy ounce at the year's onset. Following the Russia-Ukraine conflict outbreak, its value surged to a new peak of $2,049 per troy ounce on March 8. Subsequently, the gold-to-dollar ratio receded, reaching $1,622 per troy ounce by the end of September – a level revisited twice thereafter. The first ten months concluded with a gold price of $1,645 per troy ounce, reflecting a significant decline of -8.6% in dollars.
In November, gold experienced a resurgence, witnessing an increase of over $100, with the current price standing at $1,758 per troy ounce. Consequently, the total depreciation against the US currency in the first eleven months was 2.2%.
Notably, gold's price fluctuations typically lack a direct correlation with stocks, cryptocurrencies, and various other investment instruments. Instead, its trajectory is inversely influenced by government bonds and the dollar. Two adverse factors impacting gold's performance were the 15% surge in the US currency from January to November, one of the swiftest gains in history, and the rapid rise in 10-year currency yields from 1.6% to 4% by early November.
It's worth highlighting that the decline in gold's price, expressed in euros rather than dollars, tells a different story. Starting the year at 1,600 euros per troy ounce and reaching 1,645 euros by November, it registered a 3.5% increase. By November 24, it further climbed to 1,690 euros per troy ounce, marking a 5.6% increase.
