The English expression: May you live in interesting times is actually a derivation of the old Chinese proverb which was purportedly a curse. Nonetheless, we find ourselves at one such juncture today: Equities markets are enduring massive turbulence and investors are seeking safe-haven alternatives for their financial portfolios. Throughout modern history, gold has remained the safe-haven asset of choice. The recent Brexit referendum has highlighted the importance of gold bullion as the go-to investment, or store of value, while financial markets endure a category 5 storm.

Gold Performance Blows Away the Competition

If we look at the performance of gold over time, it paints a positive picture for a defensive approach to investing. For example, over the past 1 year, gold has appreciated by 18.02% or $207.70 per ounce. If we examine the performance of gold for 2016, we see a much improved performance of 22.79% or $252.40 per ounce. Over the past 30 days however, gold has appreciated by 9.30% or $115.70 per ounce. There can be no denying that gold is driven by exogenous factors more so then endogenous factors. The state of the global economy is the most important determinant of people's demand for gold.

As we project ahead, talking heads and financial analysts are confident that gold will soon breach the critical $1,400 per ounce level and move quickly towards the $1,500 per ounce level. Bullish bets on gold bullion are pervasive. Sentiment is being driven by the uncertainty related to the Brexit referendum and the implications thereof. Now that Britain has officially voted 51.9% – 48.1% in favour of leaving the European Union, a can of worms has been opened up. The extreme volatility in currency markets has been matched in equal measure by the volatility in equities markets. To say that a risk-off approach has been adopted is an understatement. Trillions of dollars of value have been erased from stock markets and traders' portfolios are emaciated.