Graphic: Gold less volatile than stock market

Gold has proven to be a less volatile investment than the stock market this year. Due to the corona crisis, share prices fell sharply, while the decline in the Gold price limited. For example, the maximum downward movement of the S&P 500 index came in at more than 30%, while gold fell only a few percent. In doing so, the precious metal proved its reputation as a safe haven again this year. While the stock markets are slowly recovering to their old level, the gold price is already up more than 10%.

Looking back at the turmoil in the financial markets, we see that the precious metal is of added value for a well-diversified equity portfolio. The precious metal pale not immune for a global flight to liquidity, but achieved a better result on balance. Investors who had gold in addition to their equity investments were able to significantly reduce the downside risk of their overall portfolio. On balance, they also achieved higher returns.

Gold has been less volatile than the stock market this year/ Gold price

This contribution was made from Geotrendlines