Gold (Information) Nuggets

Here are some quick gold facts…

Today some random facts about gold and the gold market, valuable little nuggets of information gleaned from World Gold Council research:

Gold Outperforms Paper Money

“Over the past century, gold has greatly outperformed all major currencies as a means of exchange. This includes instances when major economies defaulted, sending their currencies spiraling down, as well as after the end of the Gold Standard. One of the reasons for this robust performance is that the available above-ground supply of gold has changed little over time – over the past two decades increasing approximately 1.6% per year through mine production.  By contrast, fiat money can be printed in unlimited quantities to support monetary policies.”

Investment Demand for Gold Keeps Growing

“Gold is becoming more mainstream. Since 2001, investment demand for gold worldwide has grown, on average, 15% per year. This has been driven in part by the advent of new ways to access the market, such as physical gold-backed exchange-traded funds (ETFs), but also by the expansion of the middle class in Asia and a renewed focus on effective risk management following the 2008–2009 financial crisis in the US and Europe.”

Institutional Investors Are Getting on Board

“Institutional investors have embraced alternatives to traditional assets such as stocks and bonds. The share of non-traditional assets among global pension funds has increased from 15% in 2007 to 25% in 2017. And in the US this figure is close to 30%.”

In Good Times and Bad

“Gold is not only useful in periods of higher uncertainty. Its price has increased by an average of 10% per year since 1971 when gold began to be freely traded following the collapse of Bretton Woods.”

Gold Outpaces Inflation

“In years when inflation has been higher than 3% gold’s price has increased by 15% on average.”