Gold beats SPX, NAS100, DJIA, and Bitcoin in 2022
Despite seven interest rate hikes in 2022, gold is down only about 1% for the year. That shows the strong resilience of gold against a backdrop of the slowing economy, cryptocurrency bear market, and still relatively strong U.S. dollar. In fact, gold has outperformed the Standard & Poor 500 index, Nasdaq 100 index, Dow Jones Industrial Average, and Bitcoin.
Performance (year to date)
Gold (YTD) = -1.1%
DJIA (YTD) = -9.8%
SPX (YTD) = -20%
NDX (YTD) = -32.3%
Bitcoin (YTD) = -63.6%
Illustration 1.01
Illustration 1.01 shows the daily chart of XAUUSD. Yellow arrows indicate particular FED rate hikes throughout the year.
In 2022, gold has seen record demand from central banks, amounting to 663 tonnes in the first three quarters. Interestingly, buying from these institutions shows a growing trend in the first nine months of 2022.
Accumulation by central banks
The first quarter = 84 tonnes.
The second quarter = 180 tonnes.
The third quarter = 399 tonnes.
However, investment demand for gold declined 47% year over year in the third quarter of 2022. Despite that, in 3Q22 retail investors continued to make bullion purchases, boosting retail demand 36% higher from the third quarter of 2021. Meanwhile, during that same time, jewelry demand returned to its pre-pandemic levels, showing growth of 10% year over year.
As for our stance on gold, we continue to be bullish in the long term. Although we are worried that if the stock market selloff continues, it might put a temporary lid on the price of gold. Indeed, it might get hammered down with the rest of the market, just like on previous occasions. Therefore, we are very cautious until we see signs of decoupling between the two.
Technical analysis
Daily = Neutral/Slightly bullish
Weekly = Bullish
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Performance (year to date)
Gold (YTD) = -1.1%
DJIA (YTD) = -9.8%
SPX (YTD) = -20%
NDX (YTD) = -32.3%
Bitcoin (YTD) = -63.6%
Illustration 1.01
Illustration 1.01 shows the daily chart of XAUUSD. Yellow arrows indicate particular FED rate hikes throughout the year.
In 2022, gold has seen record demand from central banks, amounting to 663 tonnes in the first three quarters. Interestingly, buying from these institutions shows a growing trend in the first nine months of 2022.
Accumulation by central banks
The first quarter = 84 tonnes.
The second quarter = 180 tonnes.
The third quarter = 399 tonnes.
However, investment demand for gold declined 47% year over year in the third quarter of 2022. Despite that, in 3Q22 retail investors continued to make bullion purchases, boosting retail demand 36% higher from the third quarter of 2021. Meanwhile, during that same time, jewelry demand returned to its pre-pandemic levels, showing growth of 10% year over year.
As for our stance on gold, we continue to be bullish in the long term. Although we are worried that if the stock market selloff continues, it might put a temporary lid on the price of gold. Indeed, it might get hammered down with the rest of the market, just like on previous occasions. Therefore, we are very cautious until we see signs of decoupling between the two.
Technical analysis
Daily = Neutral/Slightly bullish
Weekly = Bullish
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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