In 2021, gold was an underperformer with a 4% loss, while the S&P 500 was up 27%. We are 2 months into 2022 but we are seeing a reversal in these trends with the S&P 500 down by 8%, while gold is up more than 8%.
Contrary to many investors’ expectations for this year, gold has been rising despite the Fed’s hawkish pivot with the market now expecting between 5 to 7 rate hikes this year. Some of this is due to inflation data continuing to come in above expectations and failing to turn lower as many had anticipated, i.e. the ‘transitory’ argument.
