(Kitco News) - While gold prices have struggled to attract consistent investor capital, one fund manager notes that its purchasing power remains constant despite surging momentum in the U.S. dollar.
In a report published Friday, Ronald-Peter Stoeferle, fund manager at Incrementum AG, compared gold's value to the price of the new iPhone, which will be released on Sept. 16.
He noted that the iPhone 14 pro will cost as much as $1,499, a more than 150% increase from the first iPhone that was launched in June 2007.
"That corresponds to an annual iPhone inflation rate of 6.3% per year," he said.
However, measuring the cost of an iPhone in ounces of gold and the increase is a lot more attractive. The latest iPhone is worth 0.86 ounces of gold, down from 0.97 ounces of gold for the first iPhone 15 years ago.
Not only has gold held its value against the iPhone, but Stoeferle noted that because of technical advancements, users get a lot more for the value.
"Every iPhone buyer now gets significantly more iPhone than in any previous year. As a gold investor, you have to pay even less gold for significantly better quality and performance than the original iPhone," he said.
While gold has held its value against the iPhone, Stoeferle said that the U.S. dollar is a completely different story.
"Year after year, you get less and less of an iPhone for USD 1,000," he said.
Incrementum's iPhone/Gold ratio is just the firm's latest unique outlook on gold's value performance. Every year as part of its annual In Gold We Trust report, published in June, the European Firm looks at gold versus the price of beer ahead of Oktoberfest.
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For 2022, Incrementum said that the price of one stein of beer, also known as a Maß, which is one liter of beer, is expected to rise 20% from 2019.
"But the gold price has absorbed the massive price increase in its entirety. Just like last year, one ounce of gold buys 121 Maß of beer. So, beer lovers with an affinity for gold are not left high and dry, even in times of inflation," the analysts wrote in the 2022 report.
Although gold has struggled, recently testing support around $1,700 an ounce, Stoeferle said that gold still remains in a long-term bull market and maintains his outlook for gold to reach $4,800 by 2030.
"Volatility in capital markets, in global politics, in the economy, in interest rates, and especially the volatility of inflation will be with us for some time. We are firmly convinced that gold increases the resilience of a broad portfolio, especially in this environment, and should be an indispensable portfolio component," Stoeferle said in the latest In Gold We Trust report.
