Steady long-term return expected for gold: World Gold Council strategist

GOLD, under-owned by most investors, is expected to generate real returns over the long term of 2 per cent to 3 per cent a year, net of inflation, says John Reade, chief market strategist for the World Gold Council (WGC).

Hence, after a robust performance in 2020 when gold returned over 25 per cent, he says investors should temper their expectations.

“A year like 2020 is unusual. But we do think the next three years should deliver returns somewhat above our long-term expectations. The reason for that is the US may be in a rate-cutting environment, and the US dollar will be a bit weaker because of that. We’re looking for (nominal) returns, based on our core model, of 6 to 7 per cent over the next few years.”