Gold Stands Out as a Separate Asset Class

The World Gold Council (WGC) emphasizes that gold has distinct characteristics compared to other commodities in terms of supply-demand structure, portfolio diversification capacity, and resilience in different economic environments.

In its 'Gold: The most effective commodity investment - 2026 edition' report, WGC's asset allocation strategist Jeremy De Pessemier said investors should consider gold as a separate allocation in their portfolios rather than just through aggregate commodity indices.

Gold's liquidity comes not only from futures contracts but also from the decentralized market (OTC) and ETFs. Meanwhile, its supply is influenced by both annual mining output and the amount of gold stored on the ground that can be recycled, traded, and redistributed to the market.

The WGC believes gold is a multi-functional asset used for both long-term wealth protection and growth as well as in jewelry and technology sectors. This unique demand structure makes gold prices less sensitive to business cycles than many other commodities.

In times of economic instability, reverse-cyclical investment demand can boost gold prices, while consumer demand for jewelry and technology supports the market during expansion periods.