“GOOD AS GOLD”
“Elevated risks in the Middle East are prompting safe-haven demand for gold”, says Russell Medcraft CFP. Gold jumped to its highest level since the beginning of August on Wednesday as the escalating conflict in the Middle East sent investors flocking towards the safe-haven metal.
Gold, often used as a safe store of value during times of political and financial uncertainty, has risen 2.2% so far this week. Fed Chair Jerome Powell in remarks to the Economic Club of New York agreed “in principle” that the rise in yields was helping to further tighten financial conditions and “at the margin” might lessen the need for additional rate increases. Higher interest rates raise the opportunity cost of holding gold, which is priced in dollars and does not yield any interest.
What has been the longest term trend of the price of gold
Think of Gold as a hedge for your Portfolio
The long-term return on gold has been a topic of interest among investors. Gold is often considered a safe investment and a store of value. However, it’s important to note that the performance of gold can vary over different time periods. From 1971 to 2022, the average annual return of gold and other assets worldwide was reported to be 0.4 percent, according to a Statista report. While gold can act as a safe haven during market declines, its price can also experience volatility in the short term, just like in 2008. As a result, gold may not be the most suitable investment for short-term gains.
What countries hold the most Gold
The United States has the largest gold reserve, with more than 8,000 metric tons of gold. This was more than twice the gold reserves of Germany and more than three times the gold reserves of Italy and France. China ranked sixth for the amount of gold it has on reserve, but more gold is being mined in China than any other country in the world. While the share of gold reserves constituted 67 percent of the U.S. central bank holdings, in China this figure amounted to only 3.6 percent.
Australia and Russia hold the largest reserves of gold
Australia and Russia hold a large share of the world’s gold mine reserves, accounting for 8,400 metric tons and 6,800 metric tons, respectively. Worldwide, the production of gold reached an estimated 3,100 metric tons in 2022. That same year, China produced about 11 percent of the world’s gold.
How does gold compare to the NASDAQ index
10 year returns of gold
10 year returns of the NASDAQ index
The Nasdaq 100 was launched on January 31, 1985 and full year returns start with the year 1986. The index consists of the top 100 companies that trade on the Nasdaq stock exchange.
The final point
It is clear that the hype around Gold as an asset class comes to the fore when either a conflict on global proportions of an economic fundamental like inflation or recession becomes an area of concern. As an asset consultant, Longview Economics are recommending an increase to the allocation in your portfolio to act as a hedge. Our tailored portfolios will be assessing the short term benefit of this strategy.
Financial Choice Direct Portfolios
Please visit our website financialchoicedirect.com.au for further information or contact us on 1300 664 118.
Anti Hawking Notice. You are receiving this newsletter bulletin because you have subscribed to our services in the past. You have subscribed to our online portal findmysuper.com.au or you were a member of a superannuation or retirement fund that Financial Choice provided advice to it’s members. You may also have registered with selfmanagedsuper.com.au.
Target Market Determination: We always advise clients to carefully consider the appropriateness of the product given their own knowledge of their financial situation, needs and objectives, or terms and conditions. You can read our Financial Services Guide on our website for information about our services, including the fees and other benefits. All information on our website is subject to change without notice. Please consult professional advice before you act on any of this general information.
General Advice Warning: The content of this newsletter is for the clients of Best Interest Advice and it’s other related services like Financial Choice, Find My Super and selfmanagedsuper.com.au.. The content is general advice only and has not considered your personal situation or objectives and cannot be relied upon. Please consult a financial adviser to provide you with personal advice. We cannot guarantee the accuracy of this information as it is sourced from third parties and general media. All attempts to verify its contents have been made and we only rely on reputable sources. Best Interest Advice AFSL 292925. Financial Choice is a business name registered to Best Interest Advice P/L. Any advice and information is provided by Best Interest Advice Pty Ltd AFSL No. 292925 and is general in nature. It hasn’t taken your financial or personal circumstances into account. It’s important to consider your particular circumstances and read the relevant product disclosure statement. Please consult our office to provide you with personal advice if you would like. To make an appointment please click on the link financialchoice.com.au5 million Aussies in last 4 months have gone overseas. Should you invest overseas as well?