The consumer price index (CPI) measures a country’s current economic state by considering a range of goods and services. Unlike gold prices, low CPI inflation rates are generally more favourable in terms of purchasing power, but is the UK’s CPI more stable than the value of gold?
With this in mind, the experts at The Gold Bullion Company have compared gold prices against the consumer price index to determine which is the better investment option.
Please see the full findings here: https://www.thegoldbullion.co.uk/how-do-gold-prices-stack-up-against-cryptocurrencies-and-stock-markets/
Average Change from 2019 – 2024
| Average Change (%) | |||||
| Year | Gold Price (troy oz) | YoY Change in Gold Price (%) | Consumer Price Index (CPI) Inflation Rate | YoY Change in CPI Inflation Rate (%) | |
| 2019 | £998.04 | – | 2.1% | – | |
| 2020 | £1,348.22 | 35.09% | 0.8% | -61.9% | |
| 2021 | £1,274.78 | -5.45% | 1.5% | 87.5% | |
| 2022 | £1,500.51 | 17.71% | 9.0% | 500.0% | |
| 2023 | £1,608.41 | 7.19% | 8.7% | -3.3% | |
| 2024 | £1,916.80 | 19.17% | 2.3% | -73.6% | |
| Average | 14.74% | 89.7% | |||
Over the last five years, the UK’s CPI inflation rate has fluctuated. After a five-year high in 2022, this figure has deflated yearly, including a 73.6% decrease between 2023 and 2024. Decreased inflation rates are a positive indicator of investment, providing more opportunities to save money, which you can use to invest in precious metals such as gold.
| 5-Year Change (%) | |||||
| Year | Gold Price (troy oz) | YoY Change in Gold Price (%) | Consumer Price Index (CPI) Inflation Rate | YoY Change in CPI Inflation Rate (%) | |
| 2019 | £998.04 | – | 2.1% | – | |
| 2020 | £1,348.22 | 35.09% | 0.8% | -61.9% | |
| 2021 | £1,274.78 | -5.45% | 1.5% | 87.5% | |
| 2022 | £1,500.51 | 17.71% | 9.0% | 500.0% | |
| 2023 | £1,608.41 | 7.19% | 8.7% | -3.3% | |
| 2024 | £1,916.80 | 19.17% | 2.3% | -73.6% | |
| Average | 92.06% | 9.5% | |||
Inflation has increased by 9.5% on average when comparing 2024 to 2019, a concerning figure given the cost of living crisis as the cost of most goods and services rises.
However, compared to five years ago, gold’s value has increased by more than 92% — going from £998 to £1,917 — which is almost 10 times higher than the inflation rate.
Further findings:
- Gold is a more stable investment than Ether, a new cryptocurrency, evidenced by its 14.7% average year-on-year change over the last five years compared to Ether’s 263.3%. Most notably, Ether’s worth dropped by more than 43% from £2,554 in 2022 to less than £1,450 in 2023.
- Bitcoin’s value has fluctuated over the years, with the worst dip in 2023, when it dropped by 34.6% compared to the previous year (from £33,482 to £21,887). On the other hand, aside from a 5.5% drop in 2021, gold’s value has increased steadily, making it a more stable investment, according to data from the last five years.
- Gold is a much better option than Dogecoin if you want a stable investment. Regarding value, Dogecoin has seen many ups and downs over the last five years, including a 3,070% spike in 2021 and a 43.6% dip in 2023.