Gold Is a Strategic Asset: World Gold Council

The World Gold Council released a report in March on gold as a strategic asset in investors’ portfolios. The report highlights gold’s key qualities such as liquidity, independence, value preservation, and its role as a diversifier and safe haven. It emphasizes gold’s ability to enhance portfolios by providing long-term returns, diversification, and liquidity.

The report suggests that gold should be recognized as an established investment asset produced responsibly and delivered through supply chains adhering to high ESG standards. Gold has historically provided positive long-term returns and acts as a hedge against economic uncertainty, making it valuable in various market conditions.

Additionally, gold’s negative correlation with stocks and other risk assets strengthens during market downturns, serving as an effective diversifier. The gold market is large, global, and highly liquid, attracting institutional investors. Despite its unique valuation methods and lack of cash flows, gold’s volatility and asymmetric correlation with stocks contribute to its attractiveness as an investment.

The report indicates a changing perception of gold over the past two decades, driven by increasing wealth in the East and growing recognition of gold’s role in institutional investment portfolios. Overall, gold’s traditional safe haven role complements its dual appeal as both an investment and a consumption asset, likely continuing amid ongoing political and economic uncertainties.

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