In this hypothetical scenario…

• The global economy expands by 6.3% (12.1% nominal) in 2021, up from 5.6% in Q1 as lockdowns are eased. Global real GDP growth averages 3.9% between 2021 and 2025, 70bps higher than its 40-year average.
• US CPI averages close to 3% for the year before slowing. If mirrored in core Personal Consumption Expenditure (PCE), it suggests an inflation rate above the Federal Reserve’s target of 2% for the duration of the scenario.
• US 10-year Treasury yields average 1.7% before rising to 2.5% by 2023 then further to 2.6% by 2025. In implied real terms, yields go positive in 2023 for the first time since 2019 – reaching 50bps by 2025.
• US 3m yields begin to creep up and reach 1% by 2025. German short rates remain in negative territory for the duration of the scenario.
• The US equity market returns almost 10% in 2021 but manages only 1-2% p.a. in the subsequent years.
• The US dollar weakens against the four major market currencies (EUR, GBP, JPY and CNY) from 2021 onwards until 2025.

This situation will impact

This will impact

This will impact

Source: World Gold Council https://www.gold.org/goldhub/portfolio-tools/gold-valuation-framework

IMPORTANT INFORMATION AND DISCLOSURES:

Note that the resulting performance of various investment outcomes you can generate through use of the tool and other information are hypothetical in nature, may not reflect actual investment results and are not guarantees of future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. World Gold Council and its affiliates and subsidiaries (collectively, “WGC”) provide no warranty or guarantee regarding the functionality of the tool, including without limitation any projections, estimates or calculations. WGC does not accept responsibility for any losses or damages arising directly or indirectly from the use of the tool or any information provided herein. WGC does not guarantee the accuracy or completeness of any information provided herein. The sole purpose of this information, including the tool, is educational in nature. By receiving this information, you agree with this intended purpose.This information does not take into account any investment objectives, financial situation, or particular needs of any person. Nothing contained herein is, or is intended to constitute, any recommendation, investment advice or offer for the purchase or sale or acquisition of or solicitation of investment in gold, any gold-related products or services or any other products, services, securities or financial instruments.