Home Investment / Trading Investment Strategy The case for a strategic allocation to gold – World Gold Council

The case for a strategic allocation to gold – World Gold Council

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The case for a strategic allocation to gold – World Gold Council

What makes gold a strategic asset?

Gold has a key position as a strategic long-term funding and as a mainstay allocation in a well-diversified portfolio. Buyers have been in a position to recognise a lot of gold’s worth over time by sustaining a long-term allocation and making the most of its safe-haven standing in periods of financial uncertainty.

Gold is a extremely liquid asset, which is nobody’s legal responsibility, carries no credit score danger, and is scarce, traditionally preserving its worth over time. It additionally advantages from various sources of demand: as an funding, a reserve asset, gold jewelry, and a know-how element. These attributes imply gold can improve a portfolio in three key methods:

  • Delivering long-term returns 
  • Bettering diversification 
  • Offering liquidity
 

Strat Ass 2024: Introduction icons (3 methods)

Mixed, these traits make gold a transparent complement to shares and bonds and a welcome addition to broad-based portfolios.

Furthermore, the shift in the direction of a higher integration of environmental, social and governance (ESG) targets inside funding methods has vital implications and we consider gold can play a task in supporting these. Gold — from established funding sources — ought to be recognised as an asset that’s responsibly produced and delivered from a provide chain that adheres to excessive ESG requirements. Gold additionally has a possible position to play in decreasing investor publicity to climate-related dangers.

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