Gold: a glittering future?

The dynamics of the gold market are changing. The factors that have historically supported the yellow metal are fading as a new set of influences emerges. What hasn’t changed, in our view, is the strategic value that gold can bring to portfolios.

Key takeaways
- After a stellar two years, gold has strengthened its position as an essential tool for portfolio diversification and risk management.
- Three factors have shaped gold’s performance in the modern investment era: US dollar weakness, low real yields and greater retail investor demand.
- But we think a new set of influencers are emerging to shape gold’s performance: persistent geopolitical tensions, rising fiscal deficits and sovereign debt concerns.