Gold as a risk mitigator

Investment Innovation Institute/Wouter Klijn

Repost from 8-23-2021

Ed Stein cartoon 'In case of emergency break glass', gold bar inside

“These changes in correlation make gold a particularly attractive asset for the purpose of portfolio risk management. And with bond yields at record lows, reducing their defensive qualities, investors have started to take notice of gold as a risk mitigator and source of diversification and liquidity.”

USAGOLD note: In recent times, as gold ETF demand goes, so does the price of gold. At the moment, institutional gold demand is low, and the price has remained rangebound. However, many believe that once funds and institutions regain their interest, the price will begin moving to the upside again. This article goes on to cite a World Gold Council survey showing that among the funds that do not own gold presently, 40% said they planned to add it over the next three years. Changes in sentiment, we will add, can occur quickly among funds and institutions, and when it does, ETF demand can rise or fall dramatically.

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