As we continue to experience a turbulant global economy, the price of Gold (NYSEARCA:GLD) has been seen to steadily rise. This pattern suggestive of an inverse relationship between the volatility of market and the performance of gold. However, a lurking downside risk may also be positively correlated to this upsurge. Investors need to be cautious. With the potential bubble of the gold market, a burst could lead to a drastic fall in prices. Modelling and analysis of historical trends suggest this positive correlation between the rising prices and an increasing downside risk. While gold continues to be viewed as a safety net investment, portfolios need to be diversified to buffer any potential shock. Balancing investment portfolios with both growth stocks and defensive stocks is critical. Furthermore, it’s vital to stay apprised of the global macroeconomic events that influence gold prices. More so now than ever, investors need to be tactical and strategic in their approach. Read More
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