As we tend to look at gold's performance in dollars, it is easy to forget that it also has a price in other currencies. We know that gold set records in dollar terms, but how did it perform in other countries?
In most currencies, the performance was even better. For example, gold also had a record year in Australia, helping to protect Australian investors from the rapid depreciation of their currency.
Gold, whose price is expressed in dollars, ranked as one of the best-performing assets in 2024. In Australia, it was by far the best-performing asset. The price of gold rose 38 percent in Australian dollars (AUD) in 2024, outperforming global stocks by about 10 percent. According to the World Gold Council, “strong investment demand, rising geopolitical risks, and a weaker Australian dollar supported gold's recovery.”
The dollar: the cleanest dirty shirt in the laundry.
This sharp rise in the price of gold mainly reflects the rapid devaluation of the Australian currency, which fell nearly 10 percent against the dollar.
As you are reminded every time you go to the store, the value of the dollar is rapidly depreciating. Unfortunately for many, other fiat currencies around the world are devaluing even faster.
People often refer to the dollar as the cleanest dirty shirt in the laundry. It is devaluing, but not as quickly as many other world currencies. But do you really want to wear a dirty shirt?
Gold is the clean shirt stored in the drawer. It retains its value as fiat currencies, including the US and Australian dollars, depreciate. Gold is real money, as evidenced by its performance during the recent inflationary surge.