World Gold Council

Determining the value of gold can at times make potential investors hesitant. Unable to judge what the price might do, reduces confidence in making an informed decision. Recently, gold in Australian Dollars (AUD) reached its highest ever price and breached A$3,000. While dipping slightly by the end of the first half of 2023, when is the right time to buy, or even increase, a gold allocation into a portfolio?

Amid economic uncertainty Australian investors have, so far this year, been reallocating to fixed income assets. Although currently attractive, persistent inflationary pressure can bring risks to both the growth outlook and return for these assets. Gold should be considered as a long-term strategic asset alongside bonds as it provides excellent returns in a wide range of economic scenarios.

SMSF investors continue to face inflationary pressure not seen in decades. And it could influence investment performance if the potential effects are not considered.

As inflation continues to bite, the risk of stagflation has not disappeared.  As a reaction, gold has been attracting attention from Australian investors due to its historical superior returns during such periods.

James Grant, noted economic expert and Founder and Editor of Grant’s Interest Rate Observer, joined us to share timely insights on key topics. Watch the conversation! 

Francisco Blanch, Head of Commodities and Derivatives Research at BofA Global Research, joins us for this episode of our Strategic Edge series.

Gold has come under pressure since mid-March, when it was within touching distance of its previous record high.

Authored by Johan Palmberg and Adam Perlaky: 

• Gold tends to rally when credit spreads widen…
• …but that’s usually the case when the move in credit spreads is driven by broader systemic risks
• US spreads have only recently begun to widen. Should this environment of higher inflation and geopolitical tension draw itself out, widening spreads are likely to signal further support to gold

Authored by Krishan Gopaul and Johan Palmberg

• The risk of stagflation has increased materially since we addressed the topic last year
• Europe appears to be at greater risk than the US, due to higher exposure to soaring commodity prices and a weaker economic position, but alarm bells could soon ring across the Atlantic, too
• Year-to-date, gold has performed well, arguably reflecting the Ukraine crisis and the ongoing reflationary environment
• But should stagflation become widespread it could provide further support for gold as a diversifier and risk hedge

Authored by Louise Street and Johan Palmberg: The conventional wisdom that stocks and bonds are negatively correlated is a central component of most asset allocation strategies. But the correlation hasn’t always been negative – far from it, in fact – and there are increasing signs of strain in the relationship, prompting investors to ask: could the stock-bond correlation flip? In this blog, we consider that possibility, what it might mean for the average portfolio, and how gold could help to protect portfolio performance.

What impact will the emergence of central bank digital currencies and cryptoassets have on the gold market? Find out in this podcast by OMFIF, featuring our Chief Market Strategist, John Reade.

Reid Steadman, Head of ESG and Innovation at S&P Dow Jones Indices, joins us for this episode of our Strategic Edge series. Watch his discussion with our Head of ESG Initiatives, Terry Heymann.