Gold serves as a strong hedge against volatility in times of global uncertainty
Image by Steve Bidmead from Pixabay
The top five countries that led the gold-buying rush between March 2022 and March 2023 had their central banks' highest level of gold purchases.
Source Data: International Monetary Fund's
With more than 8,000 metric tonnes of gold, the United States is the country with the highest gold reserve.
Source Data: International Monetary Fund's
Following the Russian sanctions, gold reserves that are kept in the safe deposit boxes of central banks appeared to be considerably more appealing.
Image by Matthias Wewering from Pixabay
Ruchir Sharma mentions in a recent note that "often in the past, both the dollar and gold have been seen as havens, but now gold is seen as much safer"
Image by Matthias Wewering from Pixabay
The World Gold Council's most current statistics show that inflows into exchange-traded funds (ETFs) that are backed by actual gold persisted in April. Despite a 15-tonne increase in holdings, net inflows reached $824 million.
Historically, the role of gold in terms of volatility (as measured by the Volatility Index (VIX)) as a hedge (negatively correlated with stocks) and safe haven (negatively correlated with stocks in the event of sharp stock market drops) was examined using data from the US stock market.
Image by Matthias Wewering from Pixabay
In a nutshell, the popularity of gold will increase once the Fed and ECB finally decide to stop raising interest rates. Gold is unquestionably here to stay.