Gold to Witness Bumpy Road Ahead: World Gold Council

SEATTLE (Scrap Monster): The latest report published by the World Gold Council (WGC) says that gold continued to attract attention from Australian investors, mainly on account of historical superior returns during periods of inflation and stagflation headwinds. The trade body foresees bumpy road ahead for the yellow metal.

WGC noted that gold in Australian Dollars (AUD) delivered positive returns in 2022 and so far in 2023. The country’s sovereign wealth fund added god to its portfolio during the previous year. It must be noted that gold had recorded positive performance, while other major assets tumbled in 2022. So far this year, gold in AUD posted positive returns of 1%, it noted.

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The report notes that CPI in the last quarter of 2022 surged higher by 7.8% over the previous year. The elevated inflation levels are likely to create issues for investors. Gold, has acted as a hedge against inflation, as is evident from historical data. Incidentally, gold has clocked an annualised return of 7.6% in AUD over the past two decades.

Also, gold has delivered superior performances during periods of stagflation as well. Unlike other major assets, gold has benefited investors with attractive returns during periods of stagflation. With stagflation unlikely to disappear in the near future, gold will likely play a significant role in protecting portfolio performance.