How Might Gold Perform During a Period of Deflation?

Nicholas Brooks, head of research and investment strategy, ETF Securities It is well known that gold tends to perform well during periods of high inflation. It is less well known how gold might perform in a period of global deflation. In a high-inflation environment (or anticipation of one) investors increase their demand for gold as a hedge against the erosion of the real purchasing power of paper currency. In a period of global deflation, investors and the public increase their demand for gold as a hedge against paper-currency debasement, financial counterparty failure and the rising...