Gold's real return - greater than you thought
While gold's contribution to managing portfolio risk is well established, its contribution to portfolio return is not.
Our analysis shows that the gold price over long horizons is mainly driven by an economic component coupled with a financial component that balances the overall relationship.
This simple yet robust approach – which we refer to as GLTER – uses the distribution of above-ground gold stocks analysed via different demand categories as a foundation and starting point.
And it suggests that gold's return is not only well above inflation over the long run but more closely linked to global GDP than previously understood.
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