Gold up 7 per cent year-to-date

After the price of gold in the Eurozone rose 9 per cent last year, it gained another 7 per cent in the first three months of 2024. Over the last twelve months, the gold price has risen from 58.30 to 64.92 € per gram, an increase of 11.3 per cent. The 52-week high of 65.11 € is also its all-time high to date, reached in early 2024. Since the turn of the millennium, gold has gained an average of 8.51 per cent annually – its performance in recent years is therefore very much in line with the trend.

Gold price rise significantly higher than government bond yields

It is generally recognised that adding gold to a portfolio consisting primarily of stocks and bonds can lead to a better risk-adjusted return. However, since the turn of the millennium at the latest, the precious metal has also been recognised as a portfolio performance driver. A look at the current yields of 10-year European government bonds reveals why: safe government bonds from successful industrialised countries are often an integral part of rather risk-averse portfolios, but usually offer significantly lower returns than gold.

Low yields for 10-year Eurozone government bonds 

While the yields of most Anglo-Saxon countries are around 4 per cent or slightly higher, the bonds of the economically strongest countries in the Eurozone – Germany and France – currently offer yields of just 2.36 and 2.84 per cent, respectively. Other European countries such as Finland, Sweden, Norway and the Netherlands offer even less in some cases, and the Eurozone members that have long been considered weaker economies – Italy and Greece – cannot keep up with the performance of gold with yields of 3.65 and 3.26 per cent, respectively. With the start of the interest rate turnaround in the Eurozone, the precious metal could strengthen even further in the future.