Gold prices slipped 1.6% in October and have declined for seven consecutive months, marking the most protracted plunge since 1869, according to a Deutsche Bank note.
Much of that time includes the era when the US dollar was fixed to gold, meaning the precious metal’s price didn’t move much.
But Deutsche Bank analysts also noted that such a losing streak hadn’t been seen in the half-century that followed the US coming off the gold standard, ending the Bretton Woods currency exchange regime.
Bullion jumped 1.21% Tuesday, changing hands at $1,643.56 per ounce but has declined 11% from the start of the year. Meanwhile inflation-adjusted bond yields have surged sharply following hawkish rate hikes from the Federal Reserve and other central banks.
Real yields soared from -0.49% in March to 1.54% in October, and that has “diminished the appeal of a non-interest bearing asset, even as inflation has remained high,” the note said.
Gold, however, has still outperformed most other notable assets despite the sharp plunge this year, according to Deutsche Bank research strategist Jim Reid. He wrote in a note Tuesday that outside of oil, gold is the asset nearest to parity so far in 2022.
