Gold has lost almost 10% since its March 8 recent high and some investors may be disheartened. They should not be if the bigger picture is considered. While it is only up 1.3% in #USD terms YTD, the yellow metal is up 15% vs the #JPY and 7% vs the #EUR. More importantly, gold has massively outperformed all asset classes except commodities.

The performance vs large cap equities is especially impressive as the precious metal is up 15% vs the #S&P 500. If some think that an anomaly, they would be wrong as on a price basis gold has been outperforming the S&P since the beginning of the century (see chart). The recent decline is not surprising as real rates have turned positive and the greenback is up almost 6% YTD from the same date.

As opined on these posts, the exceptional amount of global debt severely limits central banks’ room to tighten financial conditions while #inflation is likely to persist due to a variety of supply shocks and #geopolitics. If such a thesis is correct, the aforementioned headwinds should abate and gold may resume its ascent sometimes by the end of the year. In #investing, as in life, context is everything. Disclosure: Hold all assets mentioned. Not investment advice. Do your own research.