WGC Underscores Gold's Relevance as Strategic Asset in Europe

SEATTLE (Scrap Monster): The World Gold Council (WGC) report discusses gold’s strategic role as an asset in the European region.

According to the Council, investors in Europe have long recognized the huge benefits of gold. It is increasingly recognized as a mainstream investment. For instance, the per capita gold consumption in Germany and Switzerland is the highest among world countries. The yellow metal has an increasingly relevant role to play in helping the investors in the region to tackle the uncertainties ahead.

The European holdings in gold-backed exchange traded products (ETPs) have witnessed rapid growth since 2016, hitting a record high of 1,604 tonnes in 2020. They now account for almost 41% of the global gold-backed ETP market. Switzerland accounts for almost one-fourth of the total European fund holdings.

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The report identifies several reasons behind the growth of gold in the region. It has been a source of returns even during periods of uncertainty, delivering positive returns over the long run, outperforming other key asset classes. It has been a hedge against inflation and has outperformed all major fiat currencies over time.

WGC notes that adding 3%-11% in gold to an average European investor’s portfolio over the past decade would have resulted in higher risk-adjusted returns.