The ultimate safe haven has more than doubled in value since 2014. Here’s how much money you’d have today if you’d invested $1,000 10 years ago.
Gold, how much was $1,000 invested 10 years ago worth? Always considered a safe haven investment, gold has not lost its appeal even during the bullish cycle of central bank interest rates.
Its tangible nature and ability to offer protection in times of economic uncertainty make it a safe haven in times of market turbulence.
In this article, we calculate how much $1,000 invested in gold ten years ago would have returned, evaluating the ability of this asset to protect capital, fight inflation in the long term, and earn money.
Gold, how much is $1,000 invested 10 years ago worth?
To calculate how much is $1,000 invested 10 years ago worth we must start from the gold prices. The official price of gold is updated twice a day by the London Bullion Market Association (LBMA), the association that is considered the benchmark for the investment precious metals sector and which determines the so-called “fixing”.
The price of gold represents the current price of an ounce (31.1 grams) on the international market and is influenced by various factors, such as supply and demand, exchange rates, and global economic conditions. As a result, the price of gold changes over time.
Ten years ago, with $1,000 you could buy a quantity of gold equal to 1.041 troy ounces or 32.40 grams. In October 2014, gold was worth $959.92 per ounce or $30.86 per gram. Today, gold prices reached new all-time highs at $2,318.31 per ounce (or $74.47 per gram).
Therefore, if you invested $1,000 in gold 10 years ago, today you would have $2,415.
Why did gold rise?
Gold rose due to a combination of economic and geopolitical factors, despite some correlations, such as rising interest rates and the strength of the dollar, not being in its favor. Let’s analyze the relationships between gold, interest rates, inflation, bonds, and central bank policies, keeping in mind that the value of gold is mainly determined by supply and demand and that investments in physical gold can also significantly influence the market price.
Gold, Interest Rates, and Inflation
Gold is considered a real asset, so investors expect it to maintain its value when inflation rises due to its limited supply and near-constant supply. However, gold does not pay interest, so its price tends to increase with inflation but can decrease when interest rates rise. However, if we look at the gold price chart, we see that in the period 2022-2023, during which central banks raised interest rates, the value of gold did not decrease, but rather increased steadily.
Gold and Bonds
Until a few months ago, the high cost of money made gold less attractive than other investments, thanks to the real yield of inflation-linked bonds being higher than that of US Treasury bonds. Since mid-2024, government bond yields have fallen with the end of the rate-tightening cycle. As a result, gold prices have returned to shine.
Gold and central banks
The central banks also influence the price of gold, buying it as a store of value to diversify their deposits in fiat currencies. According to data from the World Gold Council (WGC), central banks added 1,037 tonnes of gold in 2023, the second-highest annual purchase in history, after a record 1,082 tonnes in 2022.
Gold and the US dollar
Another key element for the value of gold is the performance of the US dollar: the precious metal is quoted and traded in greenbacks, so gold rises when the dollar is in trouble as it has been since October 2022.
Demand for physical gold as an investment
Along with central bank purchases, demand for physical gold as an investment has helped push the price to a series of record highs in recent months: according to data from the World Gold Council (WGC), demand for bars and coins has grown by 17% in the last year, compared to the average of the last 5 years.
|DISCLAIMER
The information and considerations contained in this article must not be used as the sole or primary basis for making investment decisions. The reader retains full freedom in his or her investment choices and full responsibility in making them, since only he or she knows his or her risk appetite and time horizon. The information contained in the article is provided for information purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public to save.|
Original article published on Money.it Italy 2024-09-20 15:59:00. Original title: Quanti soldi avresti oggi se avessi investito in oro 10 anni fa?
