Recent events in Saudi Arabia are a textbook example of the stability of gold compared to other commodities, according to the World Gold Council.
Attacks on just 2 facilities caused a 5% drop in supply and precipitated a 20% spike in oil prices worldwide within the last seven days. The Council says that this highlights the concentrated nature of oil production as a source of risk
“Looking at [the] data… the top 10 oil producing nations accounted for 70% of global oil production in 2018. (Saudi Arabia … accounted for 12%.),” says the organisation’s Louise Streets.
“Gold production … is more geographically diverse. The top 10 producing nations only account for 60% of the global total, with no single producer accounting for more than 12%”
All of this means a more reliable global supply chain, with less likelihood of sudden price fluctuations and corresponding price volatility, benefitting investors looking to reduce their risk exposure, and benefitting gold itself in turn.