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23 May 2026

Home / White Papers 2025

Gold: Bugs, Bears and Myths

This material is intended only for Institutional Investors, Qualified Investors, and Investment Professionals.

Key takeaways:

  • Gold has historically been one of the few assets that performs well when both equities and bonds are struggling
  • Today’s high prices strengthen the case for thinking about gold primarily as a risk management asset rather than a return engine
  • Even a relatively modest allocation to gold has historically improved portfolio outcomes

Introduction

Gold prices today are near record highs - even in real terms - implying that forward real returns may be modest by historical standards (Figure 1). Yet gold's most compelling attribute remains its historically proven ability to enhance portfolio diversification over the long term. It is widely perceived as a safe-haven asset: during periods of market stress or crisis, investors often flock to gold for its stability and lack of credit risk. Central banks hold gold in their foreign exchange reserves precisely for these benefits and as a hedge against economic and geopolitical risks. These attributes can justify gold’s inclusion in an institutional portfolio, helping to reduce drawdowns and provide ballast, without materially sacrificing long-run performance.

In this paper, we consider gold from the perspective of an institutional investor wishing to allocate to the yellow metal within a traditional 60/40 portfolio (or variant thereof). We examine gold's diversification properties and assess its impact on portfolio risk and return characteristics.

Download the full paper

  •   11 December 2025
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