The gold prices used in this table and chart are supplied by FastMarkets. Where the gold price is presented in currencies other than the US dollar, it is converted into the local currency unit using the foreign exchange rate at the time (or as close to as possible).
Interestingly, developments in the performance and liquidity of the broad commodities market have led two major commodities indices -The S&P GSCI and Bloomberg Commodity (BCOM) Index - to adjust their composition, partly addressing the third point. Both indices recently announced that for a second year in a row, their weighting of gold will increase.
Table 1. Gold weights increased in each of the past two years
Sources: S&P Global, Bloomberg
While we continue to believe some weighting metrics, like liquidity, remain understated, we are encouraged by the acknowledgement from two leading indices of gold’s increasingly important role in the broader commodities complex.
We also believe it is important to underscore why gold is an asset that stands somewhat apart from other commodities, namely: