The latest research report published by the World Gold Council (WGC) shows that gold continues to be the most efficient commodity investment in an investment portfolio. It notes that gold should be viewed as a differentiated asset.
The Council highlights a number of key characteristics that differentiate gold from other investment options. So, according to the WGC, gold has a proven value, high liquidity and low volatility.
The volatility of gold was within the normal range and quite predictable against the background of the volatility of stocks, bonds and alternative assets. Due to the pandemic in 2020, volatility increased for major assets and commodities, but to a lesser extent, the covid affected gold quotes.
Compared to other commodities, the precious metal has provided superior returns over multiple time horizons. Moreover, it is considered to be a more effective diversifier than other products.
The report says that gold, unlike commodities, tends to gain momentum as volatility rises. Plus, gold and other commodities tend to perform well in high inflation environments.
Gold usually accounts for only about 1% of the total portfolio. The WGC report notes that income from the placement of gold has improved significantly over the past 20 years, more than from other commodities.