2014 may have been the year of the dollar, but gold was not far behind.
Gold retreated over the past several sessions, moving back into the red for the year. A stabilization of Russia's economic crisis, record high stock markets and strength in the U.S. dollar all weighed on the yellow metal.
Gold
Indeed, the U.S. Dollar Index topped 90 today for the first time since 2006. The greenback is now above the 2008/2009 financial crisis highs and looks poised to ascend further as the U.S. Federal Reserve gears up to hike interest rates sometime in 2015.
U.S. Dollar Index
Given the strength in the dollar, it's surprising that gold has held up as well as it has. At current prices, gold is only down 2 percent year-to-date, which is actually the best performance of any of the major non-fixed currencies.
The second-best performer, the Indian rupee, fell by 2.4 percent, while the worst-performing currency, the Russian ruble, plunged more than 40 percent this year.
The second-best performer, the Indian rupee, fell by 2.4 percent, while the worst-performing currency, the Russian ruble, plunged more than 40 percent this year.
In other words, gold appreciated against every major currency this year except for the U.S. dollar. That's quite a feat considering how bearish sentiment in the gold market has been.
Bottom Line: U.S. investors may not be ecstatic about gold's performance this year, but it's actually done quite well. For investors outside the U.S., gold has delivered positive returns second only to the dollar.
Bottom Line: U.S. investors may not be ecstatic about gold's performance this year, but it's actually done quite well. For investors outside the U.S., gold has delivered positive returns second only to the dollar.
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