Sponsored by World Gold Council
Over the long run, economic growth is a key driver of gold demand, especially in emerging market (EM) countries where there is a high affinity for gold as jewellery and investment. At the same time, gold tends to perform well in periods of crisis. Having a strategic position in gold helps improve EM portfolio performance as it can be used to:
- Capture EM upside through gold’s link to rising incomes
- Protect against systemic risks, which reduce portfolio volatility and losses – producing gains in some systemic sell-offs
- Hedge foreign-exchange risk at a lower cost than traditional currency hedges
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