Global investors have increased their positions in gold exchange traded funds (ETFs) by $4.3 billion from May 14!
The recent uptick in geopolitical tensions and concerns over a potential growth slowdown has pushed an ancient metal back into the spotlight: gold.
Global investors have increased their positions in gold exchange-traded funds (ETFs) by $4.3 billion from May 14, one day after the S&P 500 Index’s 2.4% trade tension driven drop, through June 20 . his pushed the year to date total of ETF flows into gold-focused products back into positive territory. The Bloomberg Gold Index rallied more than 8% over this time frame. (Source: Bloomberg, BlackRock, as of June 20, 2019. Notes: Flows are globally listed ETFs.)
Gold’s performance at times of geopolitical volatility underscores its potential value as a portfolio diversifier. However, gold has also performed well amid strong equity markets this year as real interest rates fell, as my colleague Russ Koesterich discussed in March.
But just as there are many “goldbugs” who are enamored by the asset, there are many skeptics who raise legitimate questions about it. We investigate potential merits of adding gold to portfolios below: