Many investors are drawn to gold's role as a diversifier - due to its low correlation to most mainstream assets - and a s a hedge against systematic risk and strong stock market pullbacks. Some use it as a store of wealth and as an inflation and currency hedge.
Gold is not only useful in periods of higher uncertainty. Its price has increased by an average of 10% per year since 1971 when gold began to be freely traded following the collapse of Bretton Woods. And gold's long-term returns have been comparable to stocks and higher than bonds or commodities.
As a strategic asset, gold has historically improved the risk-adjusted returns of portfolios, delivering returns while reducing losses and providing liquidity to meet liabilities in times of market stress.