We view gold as a zero coupon, long duration, store of value with unique attributes
Gold has been an important allocation within our asset mix for the last 12 months, delivering excellent returns and diversifying risk during the #COVID pandemic. We view gold as a zero coupon, long duration, store of value with unique attributes.
Gold prices have moved in lock-step with real yields (the expected after inflation return on Government bonds) for some time now, however in a period of financial repression and money printing there is scope for gold to continue generating returns beyond this one relationship.
A closer look at our #evidencebased gold indicators shows that trend is unsurprisingly positive, and that a meaningful weakening of the US Dollar, signs of life in emerging markets or a breakout above the US$1,800 level could take us back to our maximum 25% exposure from the current 15%.