Gold as an Inflation Hedge
Today’s AM fix was USD 1,594.50, EUR 1,293.29 and GBP 1,026 per ounce.
Monday’s AM fix was USD 1,581, EUR 1,287.15 and GBP 1,020.66 per ounce.
Gold closed at $1,587.80/oz in New York yesterday after having hit an intraday high of $1,592.80/oz. Gold’s gain on the day was $4/oz, or 0.25%. Silver closed at $27.34/oz, with a $0.23/oz or a 0.85% gain.
Gold has been trading up in Asian and Europe this morning, and is currently at $1,595.83/oz. Silver is trading at $27.9/oz.
WGC – Gold as a Tactical Inflation Hedge and Long-Term Strategic Asset
The last of the World Gold Council reports examined this week deals with the role of gold as an inflation hedge and a long-term strategic asset. The report says that traditional assets like fixed-income bonds and equities tend to not perform well during periods of high inflation. Gold, on the other hand, has been used as an inflation hedge for centuries. It is shown that gold’s performance has been best in the years when inflation in the US has been the highest.
The report concludes that gold, as other traditional inflation hedges like other commodities, property, and inflation-linked bonds, is likely to outperform mainstream financial assets when inflation is high. Strategically, gold is recommended as a portfolio diversifier.
The full report is available on the World Gold Council website.
Related posts:
- Gold Hits 3-Week High as China Raises Rates, Silver “Outperforms” as Food-Price Inflation Gets “Serious”
- Gold Loses 1.3% for the Week, Chinese Inflation “Controllable” But Demand for Gold “Will Get Stronger”
- Gold Holds Steady, “Train Wreck” Greece Could “Give Up” on Cuts, “QE2 Inflation a Success”
- Gold Price Not Inflation Driven?
- Gold/Silver Ratio Falls Through “Major Support” as Both Metals Rise, Bond Markets Fear Inflation
