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Gold posted positive returns in the second quarter of this year, the World Gold Council tells us today.
Unless you have recently crawled out from under a rock, this will not be news.
Investors have been piling into gold since the financial crisis amid worries that government debt and other currencies might be worth less than they thought.
Gold hit yet another record high just today, at $1,593,90 a troy ounce, driven by worries that the US might embark on a third round of quantitative easing.
Gold, the theory goes, has a real physical worth, and some wealth managers have been advising clients to have at least 5 per cent of their portfolio in gold.
But it’s worth remembering that gold still hasn’t reached an all-time high when adjusted for inflation. That was back in 1980, when an ounce was worth about $2,400 in today’s money.
The World Gold Council also tells us gold has been less volatile than other commodities of late.
“While commodities exhibited heightened levels of volatility and sharp falls in price during the month of May, gold’s volatility was modest and its price remained stable,” it says.
“Gold’s attributes make it a valuable strategic asset that investors can use to manage risk during periods of economic uncertainty. Holding gold in a portfolio enables investors to optimise the balance between return and risk.”
Gold ended the second quarter this year 4.6 per cent higher than the first quarter. In fact, gold was the place to be in the second three months of this year - as the World Gold Council tells us:
“Gold outperformed major bond, equity, and commodity indices in developed and emerging markets alike on a quarterly basis, in US$ terms. On a risk-adjusted basis, gold’s performance was only surpassed by US and global Treasury bonds.”
Investors are also still piling into gold-backed exchange-traded funds, with just over $104bn-worth of gold now held by ETFs.
