Often, investors view gold as an asset to hold when risk is high and to sell when the economy booms. But economic growth has a positive effect on gold consumer demand - the lion’s share of annual demand.
Our research shows that investors rely on gold during periods of market uncertainty, pushing demand up when inflation spikes or when the stock market tumbles. This generally influences gold prices in the short- and medium-term. However, one of the most important long-run drivers of gold is positive income growth. An expanding global middle class has translated into a source of positive momentum for demand.
Gold has delivered positive returns over the long run, often outperforming major asset classes.