Gold investment research
Our statistical analysis examines how gold acts as a portfolio diversifier, vehicle for risk management and store of value. To explore our range of reports and publications, visit our Investment research library or review our featured publications below.
Our Investment Commentary explores the main macroeconomic drivers behind gold’s price performance.
This latest edition examines gold’s performance during the first half of 2014 and focuses on two trends that, in our view, support adding gold to portfolios as a means of protection and risk management:
- The record issuance of lower-rated bonds across markets
- The historically low volatility environment.
Previous issues of Investment Commentary:
The sixth edition of Gold Investor discusses gold’s role as a liquid alternative to stocks, bonds and cash, and highlights its ability to improve portfolio risk-adjusted returns for investors – even if they hold other alternative assets.
This edition comprises:
I. How gold improves alternative asset performance
We scrutinise alternative assets – private equity, hedge funds, real estate, and commodities – to see if they deliver performance and diversification. We found that alternatives can improve portfolio performance. However, we also find that gold returns have outperformed some alternative assets and – an important diversification-and-performance point – it has a correlation to equities that is lower than any alternative asset.
II. Gold: metal by design, currency by nature
We make the case for gold as a distinct asset class rather than a commodity. Our analysis shows that gold suffers from a category confusion. It features in commodity indexes but it responds to different economic factors – particularly those that drive currencies – is less volatile, and has a far lower correlation to the business cycle.
III. The most liquid of all ‘liquid alts’
Liquid alts offer investors a more liquid investment in alternative assets. They have grown dramatically since 2008 and are expected to keep rising. However, when we compared liquid alts to gold, we found that it meets the key criteria of liquid alts (alternative, liquid and transparent) but does not have the same drawbacks – including limited liquidity and relatively high costs.
Previously published research
The World Gold Council's investment research provides investors and industry analysts with in depth insights on:
- the unique investment properties of gold as a portfolio diversifier and store of wealth
- the underlying market dynamics and gold's growth drivers
Gold, the renminbi and the multi-currency reserve system
Gold as a strategic asset for UK investors
Gold as a strategic asset for European investors
Gold: alternative investment, foundation asset
The impact of inflation and deflation on the case for gold
Gold: a commodity like no other
Liquidity in the global gold market
Gold: hedging against tail risk
Gold performance analytics
Our analysis for each country includes domestic equities, regional equities (in the case of Europe), international equities (ex-Europe) and international bonds (both in domestic currency terms). For bonds, we use the Barclays Capital Aggregate/Bond Indices, a series of market capitalisation weighted bond indices. Country files contain: Price performance, volatility, 3- and 5-year correlation matrices, rolling correlation chart, rolling volatility chart, exchange rate effect chart, gold and local equity index price chart.
One area is devoted to comparative analysis of commodities.
Please refer to our notes on methodology for further details.