Investment Insights

A momentum flush out and stronger dollar contributed to a see-saw for gold from its 50th all-time high. But gold still managed good gains in October.

The growing role of alternatives in institutional portfolios reflects a search for better returns and diversification. But these benefits come with trade-offs—like illiquidity and lagged valuations. This paper shows how gold can play a valuable complementary role. Its liquidity, low correlation, and performance during market stress make it a useful shock absorber alongside less liquid assets.

Gold has experienced an extended period of bull run since late 2022, prompting questions about potential catalysis for change in trend. Cooling risks, rising opportunity costs and easing momentum might curb gold’s current strength, while structural changes in gold demand or supply may bring longer-term weakness.

In May, tariff news and inflation helped but momentum effects including ETF outflows, countered, to leave gold flat for the month. Looking forward: Tariffs are starting to bite, but not where intended, pushing stagflation risks higher and hamstringing central banks.

Gold rose 6% m/m in April and is up by nearly 27% y-t-d. A significantly weaker US dollar and overall heightened risk pushed gold higher during the month. We expect US policy and structural risks to continue driving gold investment. Profit taking could bring pause but may also encourage consumers.

Gold hit new highs in February, supported by a weaker US dollar and extending its y-t-d gains to 9%. Rising inflation expectations, lower rates, and continued geoeconomic uncertainty are playing in gold’s favour.  

Gold punched through all-time-highs at the end of January with tariff fears, a weaker dollar and softer bond yields all contributing. Chinese gold market activity stayed true to its typical seasonal January strength and analysis suggests positive follow-through into February.