Gold underperforming but make it part of your inflation-combating portfolio

It may underperform in the near term, but could bounce back if fears of a US recession gain ground

Gold exchange-traded funds (ETFs), which track the price of gold, have corrected between 1.7 per cent and 4.9 per cent (3.5 per cent on an average) over the past three months. Their year-to-date (YTD) returns, however, are positive. Experts say the yellow metal could continue to underperform in the near term.

Strengthening dollar, rising real rates

Three months ago, the conditions were favourable for gold. Inflation had flared up across the world, geopolitical risks had escalated with the Russia invasion of Ukraine, and Covid-19 remained a potent threat.

All this should have led to heavy inflows into gold. “A considerable