The World Gold Council (WGC) has introduced a web-based quantitative tool that helps investors intuitively understand the drivers of gold performance.
The new platform, called Qaurum, will allow investors to assess how gold may react across different economic environments in three steps.
First, select a hypothetical macroeconomic scenario provided by Oxford Economics, a leader in global forecasting and quantitative analysis, or customize your own, then, generate forecasts of gold demand and supply and view the impact of key macro drivers. And thirdly, calculate and visualize implied returns for gold.
With Qaurum, investors can calculate how various macroeconomic and geopolitical environments might impact the implied performance of gold over the next five years as well as long-term 30-year returns.
Behind a user-friendly interface, Qaurum is powered by the Gold Valuation Framework (GVF), an academically validated methodology based on the principle that the price of gold and its performance can be reliably explained by the interaction of demand and supply.
GVF and Qaurum were developed in response to research suggesting that institutional investors cite the lack of an established approach to valuing gold as a key barrier to investment, according to the WGC.
“One of the WGC’s key mandates is to reinforce gold as a mainstream investment asset,” chief market strategist John Reade commented, adding that the introduction of Qaurum is “an important step in that direction” since it provides investors with a framework for evaluating the metal’s performance.
“Because gold has a unique dual nature as both a consumer good and an investment, some view its performance as unpredictable,” initiative project lead Juan Carlos Artigas said in a statement.
He said that Qaurum “does not forecast the gold price” but rather “helps investors intuitively understand” the drivers of gold performance and the connection between demand, supply, as well as financial, economic and geopolitical events.