The gold standard, the golden jubilee and role of gold in the investment portfolio
“[T]he demand for gold persists due to the fact that during periods of instability and higher price volatility, the price of gold tends to have a negative correlation with the prices of other assets. This implies that in situations of financial stress gold prices often rise while prices for other assets fall, thereby increasing the role of gold as a universal ‘diversifier’ of the investment portfolio, regardless of the source of financial stress. This differentiates gold from other ways to protect the value of your portfolio by using, for example, derivative financial instruments since these are focused on protecting the portfolio against some specific risks.”
USAGOLD note: In this captivating profile, analyst Dr. Jemeljanov passes along an old Scottish proverb on building financial security: “Get what you can, and keep what you have, that’s the way to get rich.” Gold, he believes, plays a critical role in the second part of that formulation.