Investment Insights

Gold should not be seen in isolation but as a strategic component in portfolios. It protects purchasing power and helps manage risk.

This fourth edition of Gold Investor includes two articles: I. Why Invest in gold? Gold’s role in long term strategies; II. Gold and currencies: the evolving relationship with the US dollar.

The role of gold and its benefits have been largely debated within the investment community. Throughout its two articles, Gold Investor highlights the benefits of investing in gold in the context of investment portfolios and details the past, current and future relationship between gold and the US dollar.

This third edition of Gold Investor includes three papers: I. Gold and US interest rates: a reality check; II. What drives gold? Factors that influence the asset class and its role in a portfolio; III. The role of gold in defined-contribution plans: Mexico case study.

A good understanding of the factors influencing the performance of gold is a key challenge in grasping the core benefits of this asset class: a global inflation hedge, a risk-management vehicle and a source of capital preservation.

After an eventful quarter and some rooted misconceptions, the main question revolves around gold’s future and its role in an investment portfolio. Gold Investor Volume 3 shows that the strategic case of gold is as relevant as ever.

As more pension funds around the world opt for defined-contribution structures and move away from defined-benefit plans, contributors will not receive the same guaranteed payouts seen in the past. A comfortable retirement will be based on the combination of careful planning and a thoughtful investment strategy.

To most investors, a key challenge is finding an appropriate framework of reference: what gold does, what it does not do, how and why it responds to various economic environments.

As the US economy starts to show signs of rebalancing, paving the way for monetary policy normalisation, this paper explores the misconceptions surrounding the relationship gold has with interest rates.

The conversation among private wealth advisors is no longer about if they should invest in gold but rather, how much to invest. Bob Alderman, Managing Director for the World Gold Council, explains from Opal Financial Group's 2013 Family Office & Private Wealth Management Forum.

We also highlight that higher portfolio risk- consistent with a rotation out of cash or bonds into equities- warrants a higher strategic gold allocation.

We discuss the limitations of the most common arguments and contextualise gold’s price pullbacks. We examine structural shifts that gold market has experienced over the last decade resulting in a robust set of demand factors, very different from that seen during the 1970s.

This second edition of Gold Investor includes four papers: I. Investment commentary: first quarter 2013; II. Gold and currencies: protecting purchasing power; III. Gold in the "Great Rotation"; IV. Gold holdings: ample room for growth in a broad and liquid market.

Our analysis shows that despite the recent pullback in the gold price, gold has never been more relevant as an investment asset and currency. Whether acting as an inflation hedge, a tail-risk hedge or a tool to hedge against debasement, gold’s qualities seem tailor made for these turbulent times.