Over the past 20 years, gold has outperformed alternative and traditional assets, such as developed market stocks, hedge funds, developed markets debt, global real estate investments and the broader commodities complex, according to WGC data.
Gold is also now competing with digital currencies, such as bitcoin, but the WGC reminds investors that gold is very different from cryptocurrencies since the physical precious metal is less volatile, has a more liquid market, trades in an established regulatory framework, has a well understood role in an investment portfolio and has little overlap with cryptocurrencies on many sources of demand and supply. The yellow metal is also an important portfolio diversifier when traditional assets slump.
“Gold has a strong history of resilience during periods of elevated systemic risk, having outperformed equities as well as alternatives when markets have undergone a major correction,” said the WGC.
Tom Lydon’s clients own shares of GLD.