SEATTLE (Scrap Monster): The World Gold Council (WGC), in its latest release, has addressed four of the most frequently asked questions by investors.
Gold has proven to be valuable for investors and has remained as one of the top-returning assets year-to-date. When compared with the performance of other assets over the past three-year period, it has protected capital and has served as a source of liquidity. Also, gold has performed well in other currencies as well. The investors had asked whether gold should have performed better than what it has.
Answering to queries whether Fed rate hikes will temper the safe haven appetite for gold, WGC noted that future hikes are unlikely to exceed 0.5%. Given the level of inflation, the real rates are most likely to remain negative. The rising stagflation risks will be supportive for gold, WGC noted.
Also, WGC explained that the positive correlation between oil and gold over the past year is primarily due to heightened geopolitical uncertainty.
During the turbulent first quarter of the current year, central banks across the globe added around 84 tonnes of gold to their reserves. It highlights consumers’ trust in gold’s strong performance during periods of crisis. Looking ahead, gold might attract further interest as a portfolio diversifier. WGC expects world central banks to remain net purchasers in 2022 as well.