WGC Testified Enormous Benefits of Strategic Allocation to Gold

SEATTLE (Scrap Monster): The latest report published by the World Gold Council (WGC) highlights the relevance of gold as a strategic asset. The perceptions of gold have undergone drastic changes over the past two decades, it says.

According to WGC, gold can enhance a portfolio in three ways-delivering long-term returns, improving diversification and providing liquidity. This makes gold a strategic asset over the long term. The combination of the above three characteristics makes gold an ideal addition to broad based portfolios.

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Gold has generated long-term positive returns in both good and bad economic times. It has been resilient due to its diverse sources of demand. Also, it has the potential to deliver solid returns in various market conditions. For instance, it has generated strong performance over the past 3, 5, 10 and 20 years, despite the strong performance of risk assets. This makes gold an investment tool to protect and enhance wealth over the long term.

Gold has been an effective diversifier, protecting portfolios when investors need them most. It is unique because it tends to maintain negative correlation to equities and other risk assets increases as these assets sell off. Also, gold has been more negatively correlated with stocks in extreme market selloffs.

WGC report says that gold market is more liquid than several major financial markets. Its scale and depth makes it capable to comfortably accommodate large, buy-and-hold institutional investors.