Since the start of 2022, the stock market has been on a wild ride, while gold was close to hitting a new record high in March. Which has performed better so far? We guess you already know.🙃

Gold Price Vs. Stock Market: 2022 Edition

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The Spotlight

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 in a flash, meaning it’s time for a mid-year review of stocks and gold. 🤓 

In this SPOTLIGHT, we will see how gold has performed so far compared with the biggest U.S. and European stock indexes.

But first, let’s look at the major events that have been driving the stock and gold markets over the past months. 

What has been happening in the stock market?

The stock market has been turbulent since the beginning of 2022 as shown in the picture of a falling red stock graph.

U.S. stocks have been thrown headfirst into turbulence right at the beginning of 2022.🌊

 since 2009, while the tech-heavy Nasdaq was down 9.49%, marking its 

worst month since the start of the Covid-19 pandemic.

This dramatic market drop was largely driven by the Fed’s plans to raise interest rates in response to soaring inflation.

 on February 24th, bringing no relief to frustrated investors:

, the U.S. stock market fell even deeper into the red, as Nasdaq tumbled 13.3%, marking its worst monthly performance since 2008, while the S&P 500 fell 8.8%.

the S&P 500 briefly fell into the bear market on May 18 with major company indexes tumbling as shown in a picture of the red bear walking down the red stock graph with the red arrow behind

, dropping more than 20% from its record high.

To add to the pressure, the Nasdaq went down more than 27%, recording its 

longest weekly losing streak since 1923, 

while the Dow Jones fell 1,100 points for its biggest decline since 2020.

And in case you need a better visual illustration of the recent bear market, watch this great video showing the market meltdown that happened on the S&P500 on May 18: 

the stock market is unlikely to recover until economic data proves inflation has slowed down as shown in a picture of the red patched arrow on the blue background

Unfortunately, the situation is unlikely to change until there’s enough economic data to prove that inflation has slowed down.

Here’s how Liz Young, head of investment strategy at SoFi, explains it: 

"I don't think we're at quite peak freakout yet. It might not be enough just to cross over into bea

All of this is making investors nervous about continued losses and the 

Moreover, the ongoing war in Ukraine has lowered investors' risk appetite, leading to many people selling riskier investments and turning to safe-haven assets like gold and precious metals.

What has happened to gold over the past months?

the gold price was close to reaching its all-time record high in March driven by the geopolitical uncertainty caused by the war in Ukraine

Like stocks, the gold market has lately been driven by 3 key factors:

contrary to stocks, the gold price went up

, playing its part as a safe haven and a hedge against risks: 

, the gold price was mostly surging on inflation and geopolitical concerns. 

Days before Russia’s invasion of Ukraine, the spot gold price hit 

 per ounce, rising from its $1,800 range of the beginning of February.

per ounce, close to its all-time high, showing a 

But why did the gold price increase so much?

Well, this impressive price increase was mostly triggered by the growing interest from investors around the world: since the start of the war in Ukraine, 

Then why did the gold price went down in April, you may ask? 

The short answer to this question is that the Fed started raising interest rates in March, while also signaling a faster pace of rate hikes in the coming months and boosting the U.S. dollar. 

This was one of the reasons why the gold price slipped to a more than two-month low at the end of April. 

What are the prospects for the gold price for the rest of the year?

The gold price is expected to rally after backtracking in April over the Fed’s plans to increase the pace of rate hikes as showed in the picture of big yellow letters saying “gold price”.

Here’s what analysts at Heraeus wrote in their recent gold price outlook:

“Now the trajectory of interest rates appears set for the next few months; if inflation continues to be high keeping the Fed behind the curve, gold could resume its rally.”

And it looks like gold may be heading for a significant breakout this year, or at least that’s what Bloomberg Intelligence senior commodity strategist Mike McGlone says: 

"Gold is near a bottom and on the cusp of a pretty 

when it gets above $2,000 an ounce and never looks back

. One day, we're going to wake up, and gold is going to pop above $2,000 an ounce, which is resistance that will be converted into support, and never look back.”

So, is gold outperforming major stock indexes in 2022?

So, now that you know what has happened in the stock and gold markets so far… 

You probably can already guess which has done better?😉

gold's performance versus the major stock indexes 

💡 To get the most accurate results, we excluded the latest stock market drop from our calculation, counting in only the 4

A table comparing the performance of the gold price with the major U.S. and European stock indexes between January and April 2022.

 almost all major stock indexes, except for the 

, which has increased 0.75% between January and April. 

EUROSTOXX 50, a stock index of Eurozone stocks, has suffered the biggest loss of 13.84%, followed by Germany’s DAX, France’s CAC 40, and U.S. Dow Jones. The Swiss Market Index outperformed other indices with a 7.24% loss.

Overall, volatility in the stock market can be a powerful reminder of two things: 

Why it matters to have a solid emergency fund:

 before you even start investing, set aside some money in your 

from the money you are planning to invest.

Why it’s important to have a well-diversified investment portfolio:

 one way to avoid steep losses from your riskier investments is to spread your money around and back it up with historically more stable investments like 

If you are a beginner investor and unsure where to start, read our SPOTLIGHT to learn 

Gold offers several powerful advantages as a store of value. Discover why more and more investors are turning to this precious metal.

What are the advantages of gold compared to other investments?

A look at the strong changes in demand in the gold sector y-o-y.

A Shift in Gold Demand Trends

Good thing central banks can't print gold. 😉

21.9% Annual Inflation... and Counting

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#silversqueeze

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