ECB policy changes will not affect gold relevance for European investors

Investors recognise benefit of asset class

Higher inflation across Europe in recent months raised questions over the likely timetable for the European Central Bank (ECB) to adjust monetary policy.

Earlier this month, the bank responded by slowing the pace of asset purchases under the Pandemic Emergency Purchase Program (PEPP). While a shift towards higher interest rates and slowing asset purchases may create headwinds for gold in Europe, the pace of policy change and a variety of other risks mean it will remain relevant going forward. Gold will retain its role as a key strategic asset in Europe for several reasons, namely the structural changes to asset allocation already in play due to a prolonged period of negative rates, and the need for hedging strategies to manage after-ef...