Thursday, February 19, 2009

Gold At Record High In Terms Of Most Currencies

The all time high for gold was reached on March 17, 2008, when it briefly traded as high as $1,030.80, right?

Well, yes and no. While gold has gradually recovered most of the losses it suffered in the ensuing sell-off, it is still at $975 below that peak in U.S. dollar terms. Note the emphasis on U.S. dollar. Because while gold is still somewhat below that March 17 peak in terms of U.S. dollars, as well as in terms of Chinese yuan and Japanese yen, it is in fact at record levels in terms of most currencies.

I could make the list almost endlessly long, but the below examples will be enough to illustrate how gold is at record highs against all currencies except the USD, the yuan, the yen and all currencies pegged to the USD. On March 17, the U.S. dollar was trading at:

US $0.799/NZ$
CHF 0.986/US$
SEK 6.0058/US$

Meaning that on March 17, 2008, the price of gold terms of these currencies was:
€653.9/ounce of gold
£515.2/ounce of gold
C$1033.2/ounce of gold
A$1122.4/ounce of gold
NZ$1290.1/ounce of gold
CHF1045.4/ounce of gold
SEK6190.8/ounce of gold

Today (February 19, 2009) these exchange rates are:

Meaning that given a USD gold price today of US$975/ounce, today's gold price in terms of these currencies is:

€767.4/ounce of gold
£677.1/ounce of gold
C$1217.7/ounce of gold
A$1503.9/ounce of gold
NZ$1891.9/ounce of gold
CHF1145.1/ounce of gold
SEK8358.5/ounce of gold

In terms of New Zealand dollars, gold is thus up more than 46% since the apparent March 17 peak. And in terms of all of these currencies, a buy and hold strategy for gold has been very profitable, especially considering the dismal performance of almost all alternatives.


Post a Comment

<< Home