Gold provides security in sell-off

12 March 2020

Traditional safe-haven asset, gold, will continue to provide security for investors facing the global economic sell-off and increased market volatility, according to ETF Securities.

The company’s chief executive, Kris Walesby, warned that since uncertainty over coronavirus already hit a range of industries, from travel to manufacturing, with countries struggling to implement a range of measures in the attempt to control the spread, gold was viewed as one investment that could be more than just a safe haven during sharemarket volatility.

“It can also offer diversification against all asset classes. Its ability to perform in all markets as both a consumer-driven, as well as an investment-driven asset, means it has both defensive and growth characteristics,” he said.

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“We will continue to witness the increased interest in gold as ‘lower for longer’ interest rate environment becomes the norm and may even accelerate given the new wave of Quantitative Easing that might be introduced.

“We expect gold prices to remain high in light of these changes.”

“While physical gold holdings, derivatives in the form of futures contracts or using gold mining stocks as a proxy may have been the primary options for investment in the past, ETFs have made this commodity more accessible than ever to investors globally,” Walesby said.

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