Wold Gold Council Focuses on Relevance of Gold as a Strategic Asset

SEATTLE (Scrap Monster): The World Gold Council (WGC), in its new report focuses on the relevance of gold as a strategic asset in the UK.

According to WGC, the investment demand for gold has witnessed robust growth since 2001, with the advent of new products such as gold-backed exchange-traded funds (ETFs). The tremendous expansion of middle class in Asian countries, coupled with increased buying of gold by central banks across the world to their foreign reserves have also contributed to gold’s rising investment demand. As of today, gold is more relevant than ever for investors.

The Council’s report analyzes reasons behind gold emerging as the investor’s choice. Firstly, it has been able to deliver positive returns over the long run, as compared with other key asset classes. Gold has historically rallied in periods of high inflation as is evident from the high gold returns in pound sterling as a function of annual inflation. Also, gold has outperformed all major world currencies over time. Moreover, the deep and liquid market for gold has also resulted in increased investor interest, WGC report notes.

ALSO READ: Gold-backed ETPs Touched Record Highs in Europe

The assets in European gold-backed exchange-traded products (ETPs) have reported rapid growth since the start of 2016. The investment totaled 1,121.4 tonnes in first quarter of 2019, accounting for 45% of the global gold-backed ETP holdings. Also, net holdings in UK-listed gold-backed ETPs have grown significantly from 12% to 20% of the global holdings over the past decade.