DUBAI GOLD | 3 FEBRUARY 2025

Gold has a solid reputation as a “safe haven” asset. During times of economic turmoil, political upheaval, or market volatility, wise investors seek refuge in gold.  Not only can it hold its value, but it often thrives in times of uncertainty when other traditional assets, such as equities and bonds, struggle. Furthermore, because of its low correlation with other asset classes like equities and bonds, gold is a useful asset for building diversified portfolios.

Gold can have a big impact on investment portfolio outcomes since it can lessen the chance of sharp highs and lows. Because of the market’s size, global reach, and high liquidity, investors or their beneficiaries can easily buy or sell gold even during stressful financial market periods. Nothing compares to gold as an asset. It is highly valuable and has generated average annual returns of 11% over the last 50 years.

Gold shines in difficult times and provides particularly strong returns when inflation is high. But gold also performs well during wealthy periods when jewellery and technology demand it more. The gold market is highly liquid. Investors can buy and sell gold at any time, even when the financial markets are experiencing significant stress. Gold helps lower investment portfolio risk even as it boosts investment profits.

Over a long period of time, adding gold to the typical US portfolio at an asset allocation of 6% to 10% has enhanced performance and raised returns. Because investors seek protection in trying times, gold has typically done well when stocks and other riskier assets are under pressure. However, it is uncommon for gold to increase when these assets are in positive territory.