Gold confirms role of diversification in investment portfolio

Gold is traditionally seen as a safe haven in uncertain times, as the precious metal has a negative correlation with equities and because it is not pegged to any currency. This was also evident earlier this month, when the Dow Jones index fell by more than a thousand points for the first time in its history and fell about 10% in a week. In this short and violent correction, the precious metal did exactly what we should expect from it according to the World Gold Council, because the gold price remained fairly stable under all the turmoil.

On the basis of various graphs, the World Gold Council We see how gold and short-term government bonds take on the role of safe haven, as they even increased in value slightly during the stock market correction. Partly as a result of the turmoil on the stock market, gold was the best-performing asset class this year up to and including 16 February. Silver benefited less from a flight to safety and performed roughly at the level of other commodities.