“It is not a single characteristic, but a combination of many factors that combined provides this uniqueness,” said Juan Carlos Artigas, Investment Research Manager at the World Gold Council. “Gold should be viewed as a separate distinct asset class which is a foundation to a well-diversified portfolio; as for those investors who are seeking to achieve true diversification, gold provides benefits that cannot be replicated by investing in a broad basket of commodities alone.”...In other words, seeing and treating gold as an asset makes for a better diversifier than treating it as just another commodity in a basket.
World Gold Council studies suggest that relatively small strategic allocations to gold ranging between 2 percent and 10 percent can significantly improve and protect the performance of an investment portfolio.
Artigas explained that the importance of the World Gold Council releasing this report at this particular time lies in gold having a very different reaction to economic and financial variables relative to other commodities in periods of expansion and recession.
For a more theoretical version of the point about gold being primarily an asset, see this post at the Ludwig von Mises Institute blog by Robert Blumen.