Latest Mercer report on gold as an asset class now available
News Arnulf Hinkel, financial journalist – 04.03.2021
Like the previous editions of 2011, 2014, 2017 and 2019, the recently published fifth, updated and expanded edition of the Mercer study “Gold as an asset class for institutional investors” is now available free of charge in the “Downloads” area of our website. While parts of the study focus exclusively on regulatory issues applicable to professional investing, the majority of the analyses are also of interest for private investors.
New edition also considers coronavirus pandemic
In previous editions, the Mercer report had already come to the conclusion that in times of crisis, a 5 per cent allocation of gold to the portfolio value already represents a sensible investment diversification. The risk-reducing function of gold has been proven, since in times of crisis the development of the gold price tends to be divergent to that of shares and government bonds. The updated study just published takes into account all data until the end of 2020, thus including the coronavirus pandemic as the second significant crisis situation after the European debt crisis in 2011. The study comes to the conclusion that both crises served as proof of the function of gold as a safe haven and store of value. Also, the study examined the duality of gold as both an asset class and scarce commodity.
Outlook: three scenarios for gold price development
Based on the current market environment, the report outlines three different market scenarios that could have a significant impact on the gold price. The decisive factor identified in all scenarios is investor confidence in the global monetary and economic system, or the lack thereof, especially with regard to expansionary monetary policy and a fear of stagflation or inflation. Irrespective of current market developments, the study points out that a gold allocation offers a certain hedge against inflation in the long term.
The entire report is available here: Download the study