{"id":56086,"date":"2021-12-27T08:00:20","date_gmt":"2021-12-27T13:00:20","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=56086"},"modified":"2021-12-25T16:15:45","modified_gmt":"2021-12-25T21:15:45","slug":"top-fiat-currencies-vs-gold-in-2021-the-last-shall-be-first","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2021\/12\/top-fiat-currencies-vs-gold-in-2021-the-last-shall-be-first\/","title":{"rendered":"Top Fiat Currencies vs. Gold in 2021: \"The Last Shall Be First\""},"content":{"rendered":"

It is time for a traditional yearly post to find out which fiat could beat the conventional store of value this year; all failed last year. <\/p>\n

Seven currencies represent the fiat money: U.S. dollar (USD)<\/a><\/strong> and six components of the U.S. Dollar Index (DXY)<\/a><\/strong> placed by weight: Euro (EUR)<\/a><\/strong>, Japanese Yen (JPY)<\/a><\/strong>, British Pound (GBP)<\/a><\/strong>, Canadian Dollar (CAD)<\/a><\/strong>, Swedish Krona (SEK)<\/a><\/strong> and the Swiss Franc (CHF)<\/a><\/strong>. <\/p>\n

Let us see below how you predicted the future back at the end of December 2020<\/a>.<\/p>\n

\"Currency<\/a><\/p>\n

Most of you picked Bitcoin, aka 'digital gold,' to win the race. You were right again; Bitcoin<\/a> gained more than 80% against the gold this time. I will build a separate leaderboard for cryptos in coming posts as the main coin has its universe with a pack of newbies trying to claim the throne, so stay tuned. <\/p>\n

The regular favorite, the U.S. dollar, was the second choice this year. The third bet was not obvious to me as the Swiss franc usually has been lost in the shadows somewhere between regular champions and exotic bets. <\/p>\n

The diagram below shows us this year's result. <\/p>\n

Year-to-date dynamics of top fiat currencies versus gold as of the close of December 24, 2021 <\/p>\n

\"Currency<\/a>
\nDiagram by Aibek Burabayev; source: IDC<\/em><\/small><\/p>\n

Gold has been in a large sideways consolidation this year. It is a natural course of events as we saw two consecutive profitable years for the top metal in 2019-2020. Hence, this year, it was not a one-way street as four out of seven fiat currencies beat gold.<\/p>\n

You are the true seers as your main bet on the U.S. dollar has hit the top of the chart, gaining 5% vs. gold. Indeed, the dollar has been a buzz maker lately<\/a>. <\/p>\n

The Canadian dollar has joined its U.S. sibling on the throne as it scored the same 5%. But, again, the strong energy markets underpinned this currency. <\/p>\n

It's crazy how the tables turn. In the full ranking below, you can see with the previous year's places in brackets that both dollars were top losers last time. It resembles the so-called \"Pendulum effect\" when something goes too far on one side; then it hits the other extreme over time. Hence, \"The Last Shall Be First.\" <\/p>\n

The British pound was among the top losers as well. Now it enjoys second place with a +4% gain. Recently, the currency found support in the market as \"the Bank of England raised its benchmark interest rate to tame accelerating inflation, the first-rate increase by a major central bank since the pandemic began\" <\/a>. <\/p>\n

The full ranking for Y2021 (Y2020 results are in the brackets, not including Bitcoin).<\/p>\n