How Does Gold Measure Up Against Other Global Currencies?

Posted on June 10, 2015 @ 3:10 PM EST

Comparing one thing to another is an inevitable human instinct that we all do eventually. Sometimes, this is a smart way to tell value. For instance, if there are two electronic products and one is twice the price of the other, despite having the exact same stats and specs, that’s a pretty good sign that something is up. Or if you need to compare prices and statistics in order to make an informed decision, then measuring and weighing goods against each other is a good way to make sure you make the right purchase. However, sometimes this can lead you astray. Have you ever heard the phrase “comparing apples to oranges”? You might want to make sure you’re not falling into that trap. For instance, comparing the price of a tablet to a gaming desktop is an exercise in futility – they have different purposes, after all. And so, when you compare things, you should be careful to make sure you’re closer to the former than the latter. But if you are to look at the price of gold and compare it to global currencies, you’ll find some things of interest. For instance, you might get an idea of what the global economy looks at, and the strength of gold. Investors are always looking at the ‘big picture’ for every point of data they can. Being able to understand different global factors can help you understand and predict the gold market a little better. This blog takes a look at varying economic standards and currencies around the world, and compares them to gold, in order to get a better idea of the strength of this precious metal.

Gold Is Up (and Up, and Up)

Throughout 2014 and 2015, gold has been on a global trend of slowly sneaking up. In fact, it’s comparing very favourably too many currencies now. While these numbers may seem surprising, there are two things you should remember:

1)    Gold is still under-performing next to the American dollar, which tends to dominate the conversation.

2)    Gold has been on an upwards trend for years now, and this has not been a sudden change, but rather a slow escalation over decades.

Gold is a stock that always endures, even through economic struggle or world events. There’s a reason it’s been suggested as a ‘standard’ – it is so reliable.

So, How Does Gold Compare?

Let’s take a look at some of the major world currencies and look at how the price of gold measures up.

Gold Gets the Silver Medal

One currency beat gold – the American dollar. Between the fanfare about the strong U.S. dollar, and negative fluctuations in the price of gold, it’s surprisingly easy to believe that gold was at an all time low. But in reality, besides the common ups and downs the market sees every year, this was actually a record – as gold has risen every year from 2001 to 2012 and experienced growth in the years since.

Argentine Peso

In 2014, the peso struggled due to Argentina defaulting, and gold appreciated 31% against this form of currency.

The Australian Dollar

The American dollar may have seen a surge, but the Australian dollar was not so lucky. Due to commodity prices lowering throughout 2014, gold raised 8% against the Australian currency.

The British Pound

While the gains weren’t as drastic as they were in other countries, gold saw a 5% surge in the UK throughout 2014.

The Canadian Dollar

As Canada relies closely on its oil prices for economic strength, the nation was hit hard by the price of oil falling. The Canadian dollar struggled as a result, leaving gold up by 7.9%.

The Chinese Renminbi

In a world full of big changes, Chinese investors could breathe a small sigh of relief – gold only surged 1.2%, leaving the Chinese currency nearly unchanged.

The Euro

Anyone who was watching the headlines about the European Union could tell that there was trouble afoot in the region. Greece’s economic woes, as well as struggles across the rest of Europe, weakened the Euro substantially – leaving gold up 12.1% in 2014.

The Indian Rupee

India, on the other hand, saw little to no change in the price of gold, with the precious metal only being up 1% in 2014.

The Japanese Yen

The Japanese Yen, however, was a different story. The Bank of Japan’s bond buying program, combined with the U.S Federal Reserve ending a long serving program, led to gold spiking up by 12.3%.

The Russian Ruble

If the numbers above surprised you, this one might just blow you away. Compared to the Russian ruble, gold spiked 79% during 2014. Investors may not be as surprised, considering the events in Crimea and the Ukraine, the resulting sanctions, and a drop in the price of oil.

The Ukraine Hryvnia

Indeed, the only currency that performed worse compared to gold was the Ukrainian Hryvnia. Gold surged up to 90% – again, not surprising considering the global events that dominated headlines in 2014.

If you’ve been wondering how gold stacks up worldwide, the question is – surprisingly well. The only country that came out ahead with their currency is the United States of America. Of course, this is just one piece of data that should determine whether you should invest in gold. However, the price of gold compared to currencies is one piece of information. For more information on precious metals and their markets, visit the EDI refining blog.