Gold: the most effective commodity investment
“Gold has little or no correlation with many other assets, including commodities during times of stress. Crucially, however, the correlation is dynamic, changing across economic cycles to the benefit of investors. Like other commodities, gold is positively correlated to stocks during periods of economic growth when equity markets tend to rise. However, gold is negatively correlated with other assets during risk-off periods, protecting investors against tail risks (Chart 3, below) and other events that can have a significant negative impact on capital or wealth – a protection not always present in other commodities.”
USAGOLD note: A detailed study presented mostly for the benefit of investment professionals that differentiates gold from the rest of the commodities complex especially when volatility rises.
Chart 3: Gold, unlike commodities, tends
have a positive performance when volatility increases
Performance of stocks, gold, commodities and VIX during periods of systemic risk
Repost from 9-17-2019