Gold will Continue to be a Good Hedge In Spite of Recent Rally, Says WGC
The stellar run in gold prices was mainly driven by record monthly inflows into gold-backed exchange-traded funds (ETFs).
SEATTLE (Scrap Monster): The World Gold Council (WGC) announced publication of its latest gold market commentary.
This year, gold has already reached new highs 39 times. Gold prices have increased 47% so far this year. Since 1979, the commodity produced the highest return in a calendar year. Strong options market activity, growing political tension, and currency weakness were the primary causes of the upward momentum in gold prices. The only drag was caused by investors' profit-taking and asset managers' portfolio rebalancing.
Record monthly inflows into gold-backed exchange-traded funds (ETFs) were the primary driver of the spectacular surge in gold prices. The inflows into gold ETFs had their best month ever. The 146 tonnes of inflows were worth $17.3 billion. The regions of Asia, Europe, and North America dominated the flows.
According to the WGC research, gold is a good short-term hedge against stock drawdowns and a terrific long-term diversifier. Given the abundance of supportive factors elsewhere, the trade group expressed confidence that gold will keep its ground and possibly receive further elevation should equities undergo a slump. According to WGC, only a significant liquidity crisis may cause both gold and stocks to plummet.
YOU MAY ALSO BE INTERESTED IN:
Deutsche Bank Raised 2026 Gold Price Forecast to $4,000 per oz
UBS Lifts Gold Price Target to $3,900, with a Preference for These Mid-Cap Miners