SEATTLE (Scrap Monster): The latest report published by the World Gold Council (WGC) says that gold emerged as one of the best performing assets during the first half of the current year. It delivered positive returns during the six-month period at below average volatility levels. The yellow metal has helped investors mitigate their losses during the extremely volatile period.
WGC report states that gold’s performance so far in the year may seem dull, but it has held up well during the year-to-date period. The trade body anticipates significant challenges to investors during the second half of the year.
The persistently high inflation has forced many central banks across the world to lift policy rates this year. The U.S. Fed has hiked its rates by 1.5% so far this year, whereas the Bank of England has raised its base rate five times since November last year. The Swiss National Bank too has hiked rates for the first time in 15 years. These actions have had significant impact on financial markets, including gold, WGC noted.
As is evident from historic data, gold performs well during periods of high inflation. The WGC analysis noted that gold lags other commodities in commodity-led inflationary periods, but catches up and outperforms over the subsequent 12-18 months.
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