Investment Insights

This report investigates the nascent use for gold as collateral for central counterparty clearing in the Global OTC markets. It examines the unique characteristics of gold which make it an ideal form of collateral.

This report examines gold's role in the portfolio for diversified investors who may already have an allocation to commodities. It shows that gold's physical attributes and functional characteristics set it apart from other commodities. This analysis shows that the effect of gold on a diversified portfolio cannot be replicated by a commodity basket alone.

This report sets out to explain the workings of the gold market with a particular focus on its size and liquidity. Given that central banks invest a majority of their reserves in sovereign debt markets, we compare gold to sovereign debt markets from both of these perspectives.

Natalie Dempster, Director of Government Affairs, World Gold Council, discusses the role of gold as a partial solution to the eurozone sovereign debt crisis.

This report shows that gold does not only help to increase expected risk-adjusted returns in a portfolio but can also significantly mitigate the potential for wealth to be eroded by extreme events, as evidenced by statistical analysis of tail risk scenarios. Investors who do not hold gold or view it purely as a temporary safe haven asset are failing to harness its full potential to protect wealth.

A presentation by Juan Carlos Artigas of World Gold Council.

Successive new records in the gold price have increased concerns that gold may be overvalued vis-à-vis other assets. Some investors and market commentators even question whether the gold market is in a “bubble.” This report takes a statistical approach to these concerns and examines the prospects for future gold demand.

Our analysis suggests, firstly that gold is a leading indicator of velocity and therefore inflation; secondly that despite of a large output gap around the world and anaemic economic recovery, investors are justified in their concern that quantitative easing policies, resulting in rapid money supply growth, will eventually lead to an increase in the velocity of money and inflation.