London: The US-centric view of gold would not continue indefinitely, the World Gold Council forecast on Thursday, when it pointed out that the gold price had risen in at least three currencies in 2015 while falling 11% in US dollar terms. It was the local price – and not the US dollar price – that mattered most, as more than 90% of physical gold demand now arose from non-dollar investors, according to a report published in Miningweekly.com.

This was happening against the background of the interconnectedness of global financial markets presenting lower potential reward and bonds offering less protection at a time of market volatility risk in advanced economies. The council concluded in a six-page investment commentary that conditions likely to make 2016 different from 2015 included interest rates no longer being a dominant driver of the gold price.

Amid expensive stock valuations and high global market risk, gold’s role as a portfolio diversifier and tail risk hedge had become particularly relevant against the background of the gold market continuing to expand in emerging economies.

Research had shown that investment in gold helped to lower volatility by diversifying portfolios and also assisted in preserving purchasing power and protecting against inflation. Gold thus covered a broader set of circumstances than purpose-designed consumer price index hedges. At the same time, the Asian gold market was continuing to expand, with the People’s Bank of China adding to its gold reserves, the Shanghai Gold Exchange eyeing the introduction of a yuan-denominated trading mechanism and the Indian gold trade mooting the establishment of a gold exchange.