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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive summary
- In the past few weeks, we have seen that support for Gold has remained strong despite the dramatic fall in negative-yield debt, the rise in real rates, USD strength and the fall in annual change in liquidity.
- Gold has historically acted as a ‘zero-beta’ asset that generally rises in periods of geopolitical uncertainty and market selloffs.
- The persistence of inflation has led to a significant divergence between the traditional 60/40 asset allocation and the ‘Modern’ allocation (which includes gold).
Link to full publication:
The chart below shows the performance of the classic 60/40 equity bond portfolio and the ‘Modern’ allocation, in which we swap 20% of the bond allocation for gold (60/20/20 equity bond gold portfolio).
The 60/20/20 portfolio currently trades at a 10-point premium over the classic 60/40 portfolio (indexed in January 2018) as gold prices have remained firm in the current environment (relative to LT government bonds).
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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