Gold shines amidst global volatility
Amidst global share market volatility and uncertainty, investors are turning to gold to diversify their portfolios, according to exchange traded fund manage BetaShares. Gold has reemerged as an in-demand commodity, significantly increasing in value in the past few months. According to BetaShares Managing Director, Alex Vynokur, gold’s recent growth trajectory is driven by a number of key economic factors which may continue to impact markets throughout 2016.
“Widening credit spreads across a broad range of sectors, including US oil and gas, are pushing investors to seek alternative asset classes like gold,” said Mr Vynokur.
“In addition, central banks behind traditionally ‘safe haven’ sovereign issuers such as Bank of Japan, Swiss National Bank and European Central Bank have moved to negative interest rates.
“In this climate, gold tends to represent a ‘safe haven’ asset that does not have a negative real return. Gold is widely regarded as a reliable store of value, and has been for centuries. In uncertain markets like today’s, investors are once again turning to a traditional refuge, and gold has become an in-demand investment.”
BetaShares is seeing the impact of investor appetite for gold first hand with increased inflows to the BetaShares Gold Bullion ETF – Currency Hedged (ASX: QAU).
Since the beginning of the year QAU has almost doubled in size while gaining approximately 14%, significantly outperforming the S&P/ASX 200 which is down almost 7%*. Backed by physical gold, QAU tracks the performance of the price of gold bullion. QAU is currency hedged, to help protect investors from currency risk, thus providing more pure exposure to the price of gold. *Past performance is not an indication of future performance.