By Akin Oyedele
"A perfect storm" in markets has left investors scrambling to add gold to their portfolios for protection, according to the World Gold Council.
Investors have another prime and relatively safe choice in the government bonds of developed markets, but that has been compromised by "unconventional monetary policy," the council said in its market update for August.
The yields on developed-market government bonds have trended lower as demand has risen.
Sovereign authorities like the European Central Bank are stoking this demand through their bond purchases, which are pushing down yields.
As bond prices rise, their yields fall. And this policy approach by central banks has left investors questioning its effectiveness as they scramble for better yield elsewhere, like in gold.
Gold prices have surged 27% this year, outperforming many other commodities and the S&P 500.
The council used the Bank of Japan's weak bond auction as an example of what it believes investors think of central banks.
On Tuesday, a Japanese 10-year-bond auction drew the weakest demand in five months. That was after Japan announced a stimulus package worth over 28 trillion yen, or $275 billion, but smaller than markets had expected.