Some of the world’s largest money managers have been rebuilding gold positions after this year’s sharp retreat from record highs, betting that the metal’s long-term appeal remains intact even as the Federal Reserve turns more hawkish on inflation.
Amundi SA, Europe’s biggest asset manager, has bought bullion and expects prices to return to $5,000 an ounce by the end of 2026. Pictet Asset Management, Robeco and Fidelity International have also added back exposure after trimming holdings earlier in the year, when gold tumbled from its January peak.
“Gold is an asset that we consider to be cheap, a good hedge and reasonably liquid,” said Lorenzo Portelli, head of cross-asset strategy at Amundi Investment Institute. Still, he said the firm would wait for greater clarity on the Fed’s interest-rate path before adding to last month’s purchases.
That cautious tone was shared by more than a dozen portfolio managers interviewed, whose firms oversee a combined $27 trillion. Without exception, they had either rebuilt gold allocations in recent weeks or were maintaining bullish positions.
A breakout above gold’s recent ceiling near $4,600 an ounce won’t be easy, several managers warned. Rising Treasury yields and increased bets on at least one more Fed rate hike before year-end are sapping support for bullion, which pays no interest and tends to lose favor when borrowing costs climb. Fed Chair Kevin Warsh reinforced those expectations at the Jackson Hole symposium, warning that inflation is not slowing meaningfully toward the 2% target.
So far, those headwinds haven’t shaken the conviction of long-term investors. Gold surged to a record near $5,600 an ounce in January, driven by speculative capital, then spent much of the year retreating. By June, elevated energy prices and inflation shocks from the Iran war had dragged it back toward $4,000. That level, several fund managers said, proved too attractive to ignore.
“The downdraft to $4,000, if you didn’t own it already, was a very good buying time,” said Michael Cuggino, president of Permanent Portfolio Family of Funds. “The long-term macro story is still in place, and that’s bullish for gold.”
For Arnout van Rijn, a portfolio manager at Robeco, the catalyst was an acceleration in central-bank purchases. Official-sector net buying reached 289 tons in the second quarter, the highest for any second quarter on record, according to the World Gold Council.
Sophie Huynh, a strategist at BNP Paribas Asset Management, pointed to another signal: the fading correlation between gold and risk assets such as equities. “The froth of gold has come off,” she said, with bullion now powered by “fundamental drivers such as central-bank purchases and multi-asset managers looking for portfolio hedge.”
Evidence of renewed appetite is visible in CFTC data, where funds’ net-long positioning rose to its highest level this year in the week ended Aug. 25. Bridgewater Associates founder Ray Dalio added to the bullish chorus, urging investors to cut bond holdings and allocate as much as 15% of portfolios to gold as a hedge against a US debt crisis. Gold spiked after Treasury Secretary Scott Bessent announced additional buybacks of long-dated debt, reviving interest in the so-called debasement trade.
Some money managers said concerns about the dollar’s reserve-currency status are overblown, but most agreed that a steady shift toward more diversified portfolios will provide lasting support for bullion. “Gold should still hold value as a hedge against what the Fed can’t control,” said Tracy Chen, a portfolio manager at Brandywine Global Investment Management.
