In this edition of Gold Investor (Volume 8, March 2015), we take a closer look at gold’s performance and its relevance for investors in the current environment, paying close attention to:
- Gold in a rising dollar environment
In addition, we discuss:
- The factors that drive gold
- The relationship between gold and US interest rates.
The World Gold Council’s leading industry publication on gold demand trends, analysed by both sector and geography for the full year 2014.
This latest edition examines gold’s performance year-to-date and explores relevant macroeconomic factors that can influence gold’s performance into Q4 2014.
In our view, there are four main reasons investors should view gold as a valuable portfolio component today:
- Positive economic growth is supportive of gold’s long-term demand
- Rising interest rates do not necessarily push gold prices down
- Gold’s cost effectiveness makes it an attractive portfolio hedge compared to other strategies
- Constraints in mine production and falling gold recycling have kept the market in balance.
Gold has unique properties as an asset class. The diversity of gold-backed and gold-related products means that gold can be used to enhance a wide variety of individual investment strategies and risk tolerances.
Our analysis shows that gold can be used in portfolios to protect global purchasing power, reduce portfolio volatility and minimise losses during periods of market shock.
It can serve as a high-quality, liquid asset when selling other assets would cause losses.
Explore the factors that have driven China’s rise to become the number one producer and consumer of gold and why the market will continue to expand, irrespective of short term blips in the economy.