How does gold respond when US credit spreads widen?

Authored by Johan Palmberg and Adam Perlaky:?

  • Gold tends to rally when credit spreads widen…
  • …but that’s usually the case when the move in credit spreads is driven by broader systemic risks
  • US spreads have only recently begun to widen. Should this environment of higher inflation and geopolitical tension draw itself out, widening spreads are likely to signal further support to gold


Stagflation strikes back

Authored by Krishan Gopaul and Johan Palmberg

  • The risk of stagflation has increased materially since we addressed the topic last year
  • Europe appears to be at greater risk than the US, due to higher exposure to soaring commodity prices and a weaker economic position, but alarm bells could soon ring across the Atlantic, too
  • Year-to-date, gold has performed well, arguably reflecting the Ukraine crisis and the ongoing reflationary environment
  • But should stagflation become widespread it could provide further support for gold as a diversifier and risk hedge


Stocks go down, bonds go... down?

Authored by Louise Street and Johan Palmberg: The conventional wisdom that stocks and bonds are negatively correlated is a central component of most asset allocation strategies. But the correlation hasn’t always been negative – far from it, in fact – and there are increasing signs of strain in the relationship, prompting investors to ask: could the stock-bond correlation flip? In this blog, we consider that possibility, what it might mean for the average portfolio, and how gold could help to protect portfolio performance.


Inflation Roundtable

During a virtual round table, in partnership with European Pensions, a panel of industry experts consider the medium and long-term prospects for inflation, its potential impact on portfolios and the hedging tools available for pension funds to prepare for whatever the future may hold.