Gold’s record-breaking price rally is no secret—the precious metal’s path to a series of all-time high prices has generated headlines throughout the year. Recently, for example, when the price surged above $2,500/oz. on August 16, 2024, platforms like Fox News and CNN Business reported that a standard 400-oz. gold bar was worth over one million dollars.
What hasn’t been as widely reported is that gold has also been outperforming assets that usually get more media attention, including stocks. However, the news media has begun to catch on to this phenomenon.
Gold is outperforming tech stocks.
Tech stocks were on a tear earlier this year, with chip stocks like Nvidia riding gains from AI and other applications to high prices. In late June 2024, Yahoo Finance reported that Nvidia was, year-to-date, responsible for almost a third of the gains for the S&P 500. But behind the hype, even record-breaking rallies in tech stocks were weak compared to the growth of gold.
On August 2, 2024, CNBC reported that gold prices were outpacing the gains seen by the S&P 500, with gold prices having grown 16.5% year-to-date versus the S&P’s growth of only 9.9%. More recently, Yahoo Finance reported on August 28, 2024, that the price of gold was up 24% year-to-date, compared to the growth of the heavily tech-based Nasdaq stock index, which was only up 18% in the same time frame.
Physical gold is also beating so-called “digital gold.”
Gold is not only performing well as a growth asset, but it is also beating other safety assets used to hedge against risk. Bitcoin has often been touted as a safe-haven asset that acts as “digital gold.” However, the cryptocurrency’s relative volatility has hampered its ability to compete with physical gold.
MarketWatch reported on August 23, 2024, that from December 31, 2018, to December 31, 2023, bitcoin demonstrated an average daily volatility of 60%, while gold’s volatility was only 15%. As MarketWatch puts it, “The difference in bitcoin and gold’s recent performance has again confirmed that, while many bitcoin bulls hope the crypto will serve as a store of value, it has mostly been trading as a risky asset.”
Gold’s rally looks likely to continue.
Many of the factors that have driven gold’s recent stellar performance, such as geopolitical uncertainty, changing Federal Reserve policy, and record gold buying by central banks, look likely to keep pushing prices for the precious metal higher. The question you must ask yourself is this: Do you want to act now and take advantage before this rally continues even higher, or do you want to wait a few years and read more news about how gold has beaten other assets after the fact?
