What role can gold play in a portfolio?
Gold is often described as protection, but that is not a natural law. Its usefulness depends on time horizon, currency, cost and the rest of the portfolio.
Diversification changes over time
Gold can behave differently from equities or bonds during some market phases, but correlations are not constant. Several assets can fall together in a liquidity shock, while currency moves can amplify or reduce the result for a euro investor.
No running income
Gold pays neither interest nor dividends. Before costs, the economic outcome depends entirely on the later market price. Higher real yields may reduce the appeal of non-yielding assets; uncertainty or loss of confidence may increase demand.
Sizing is personal
Liquidity needs, ability to bear losses, horizon, existing risks and tax circumstances differ. A universal gold allocation would therefore be a personal recommendation without adequate information. Define the intended role first and test different market outcomes.
Gold can be one component, but it does not replace emergency liquidity, broad diversification or planning suited to personal goals.