Gold’s record-breaking rise is less about panic and more about preemptive portfolio protection, according to World Gold Council senior market strategist John Reade.
“Gold’s continued rally is increasingly driven by economic events rather than short-term speculation,” Reade said. “Expectations of US Federal Reserve rate cuts, declining real yields, and high correlations between equities and bonds are reshaping portfolios and investor behaviour.”
The metal has already reached seven all-time highs this year, extending a record streak of 95 since 2024. While geopolitical tensions often make headlines, Reade said gold’s real value lies in shielding portfolios before market stress emerges.
“The protection gold provides frequently shows up before the event, not after it,” he said. “Gold’s value lies less in reacting to crises and more in quietly improving portfolio resilience before correlations change and volatility rises.”
A key factor driving this preemptive appeal is the changing behaviour of bonds. Once a dependable hedge, government debt has increasingly moved in tandem with equities, leaving traditional portfolios vulnerable.
Gold, in contrast, carries no counter-party risk and has historically maintained low correlations with equities, offering resilience when conventional assets fail.
Investors often ask about the “right time” to buy, but Reade said timing is less important than strategic allocation.
“Allocations of three to 10 per cent have historically improved risk-adjusted returns, not because gold always rises but because it behaves differently when other assets struggle,” he said.
“This is why the World Gold Council’s research consistently frames gold as a strategic allocation, not a short-term hedge.”
Subscribe to Australian Resources & Investment and receive the latest news on commodity prices, resource developments, executive movements and more.