Our analysis suggests that gold is still the most effective commodity investment in a portfolio as it continues to stand apart from the commodities complex. It deserves to be seen as a differentiated asset as it has historically benefited from six key characteristics:
- It has delivered superior absolute and risk-adjusted returns to other commodities over multiple time horizons
- It is a more effective diversifier than other commodities
- It outperforms commodities in low inflation periods
- It has lower volatility
- It is a proven store of value
- It is highly liquid.