REPORT
Can gold make your portfolio shine?
Understanding when and why gold belongs in your multi-asset portfolio
Gold's diversification benefits extend far beyond returns, but context matters
Gold's performance in recent years has been impressive. And, as geopolitical tensions rise and inflation remains persistent, its traditional role as a safe haven and wealth preserver matters even more than its return potential. But what exactly drives gold prices and when does it make sense to add to your asset mix?
This report examines gold through a portfolio risk lens, revealing when the precious metal adds genuine diversification value and when it may actually increase overall volatility. Using multi-factor risk analysis spanning 2017-2025, we identify the specific market conditions where gold shines and where its benefits diminish.
Read this paper to discover:
- The primary macroeconomic drivers behind gold prices, including real yields, the US dollar, and monetary policy expectations
- How gold's correlation with equities and bonds shifts dramatically across different market regimes
- The key differences in gold's diversification profile for USD versus non-USD investors
- Specific periods when gold actively reduced portfolio volatility, particularly during crisis events like COVID-19 and the Ukraine invasion
Contributor
Christoph Schon, Lead Principal Investment Decision Research, SimCorp