Gold has been making a comeback.

In light of the recent market volatility and rebound in Gold price, we have summarised the main points from exColumnist of The Australian Financial Review, now Chief Economist with BetaShares, David Bassanese. His full article can be accessed here: Market Insights: Negative rates positive for Gold.

The recent rebound in the price of gold in light of heightened financial market volatility should serve as a reminder to investors of the safe haven properties that this precious metal can offer.

Gold’s allure as a potential safe haven during the next (inevitable) setback in global economic growth and equity prices, moreover, could be enhanced by the greater likelihood of more central banks moving toward negative interest rates policy (NIRP).

The further short-term interest rates move into negative territory, the less appealing will be cash as a safe-haven asset (as investors will now be paying banks for the privilege of holding their cash).

Another factor to consider is more central banks appear to be looking to gold as a source of reserve diversification away from the US dollar, particularly now that many major non-US currencies (such as the Euro and Yen) are being actively “trashed” by their own central banks.