From a multi-family office perspective, gold has always been a paradox: a non-yielding asset that often earns its place by what it doesn’t do – default, get diluted, or depend on someone else’s promise to pay.
With rising global tensions and changing market patterns, it’s time to take a fresh look at gold – how its role has evolved over the past decade and what place it holds in a well-balanced investment portfolio today.
A (very) short history: from money to ballast
Gold moved from a monetary anchor to a financial diversifier over the last century. The decisive break came on 15 August 1971, when the U.S. ended dollar convertibility into gold and the Bretton Woods system unraveled; since then, gold has floated freely and behaved more like a global macro asset than money itself.
Source: Ghizoni, Sandra Kollen. “Nixon ends convertibility of US dollars to gold and announces wage/price controls.” Federal Reserve History 22 (2013): 2013.
Exchange-traded vehicles, most notably GLD (launched 2004), made gold easy to hold alongside stocks and bonds, which is why most institutional portfolios now treat it as a strategic sleeve rather than a collectibles allocation. State Street notes that gold’s usefulness stems from three persistent traits: diversification, liquidity, and long-term preservation of purchasing power.
Source: State Street Global Advisors
What’s changed in ten years?
2015 was a trough in investor enthusiasm. The Fed had just hiked for the first time since the financial crisis, ETF holdings were leaking, and sentiment was poor. SPDR’s own review recorded net outflows from gold-backed ETFs of ~133 tonnes in 2015 as investors favored risk assets.
2024–2025 is the mirror image. Central banks have become consistent, price-insensitive buyers – purchasing over 1,000 tonnes per year for three consecutive years – and have helped propel prices to record levels in 2024–2025. Reuters reported the most significant semi-annual ETF inflows since early 2020 in 1H 2025, marking a clear shift in sentiment from the outflows of 2021–2023. Even after pullbacks, banks and long-term allocators remain bid.
This official-sector backdrop is not trivial. The European Central Bank’s 2024 reserve data indicated gold had overtaken the euro as the second-largest reserve asset globally, behind the dollar – underscoring gold’s role as a sanction-resistant, liquid store of value for sovereigns.
At the same time, markets are acknowledging gold’s cyclical volatility: we’ve seen sharp rallies to new highs, followed by technical corrections – like late October 2025’s sell-off – reminding investors that safe haven doesn’t mean straight line.
Why portfolios care (again)
The investment case is less about “inflation hedge” in isolation and more about portfolio math in unstable correlation regimes. The World Gold Council’s 2025 research shows that when stock-bond correlations turn positive, a larger gold weight is needed to preserve the same overall risk profile. In other words, gold helps when the classic 60/40 stops diversifying as advertised.
State Street frames it simply: gold can increase diversification, offer downside mitigation in stress, and preserve purchasing power across cycles – benefits we’ve witnessed through multiple crises.
Where we are now, and what to do about it
In 2025, gold sits at the intersection of geopolitics, liquidity preference, and correlation management. The headline driver is official-sector accumulation and a reassessment of sanction risk – factors that did not dominate the narrative in 2015. The result: higher “sticky” demand and a higher clearing price range, albeit with the usual volatility spikes. The World Gold Council’s 2025 “strategic asset” work and central-bank surveys both reflect this regime change.
Price targets are not our core process, but the direction of consensus is informative. J.P. Morgan Research, for example, projected $3,675/oz average by Q4 2025 – a sign that even rate-sensitive houses see structural support.
For families, the practical question is the allocation size and vehicle. We typically approach gold in two sleeves:
Strategic core (2–7%) held through physically backed ETFs or allocated bullion, designed to be held through cycles for diversification and tail-risk mitigation. The exact weight depends on the rest of the portfolio and the current stock-bond correlation. WGC’s optimal-weight research argues for higher gold weights when bond-equity correlation is positive – a useful calibration tool in 2025.
Tactical overlay (±1–3%), expressed via ETFs or futures, to lean into stress periods or fade exuberance after parabolic runs. Recent price action – rallies to records followed by swift pullbacks – reinforces the value of a disciplined rebalancing protocol rather than ad-hoc timing.
Then vs. now: how people use gold
Ten years ago, many investors framed gold as a trade on inflation or as insurance you hoped never to use. Today, it looks more like a policy hedge: protection against geopolitical fractures, sanctions risk, and correlation breakdowns. Central banks exemplify this shift; their multi-year buying streak is less about CPI and more about reserve resilience and neutrality. As the WGC summarizes, gold remains “a mainstay allocation in a well-diversified portfolio,” especially when uncertainty is the base case.
Expert voices, briefly
• The World Gold Council’s 2025 strategic paper puts it plainly: gold has a “key role as a strategic long-term investment” and a “mainstay allocation” for diversification when uncertainty rises.
• Market practitioners echo the nuance: gold’s safe-haven effect isn’t automatic, but sizing the position correctly preserves its value as a diversifier rather than a core growth engine.
Bottom line for multi-asset families
Gold isn’t a panacea – and it’s rarely the hero of the performance report in booming markets. But in a world where the classic 60/40 can wobble, where great-power competition shapes flows, and where “risk-free” assets can suddenly correlate with risk-on, gold earns its seat. Keep a strategic core, respect the tactical cycles, and measure success not by yield, but by resilience when it’s most expensive to buy. That’s the quiet compounding gold contributes: a steadier path through uncertain regimes
Disclaimer: The information contained in this publication does not constitute financial advice. This publication is for informational purposes only and is not research; it constitutes neither a recommendation for the purchase of financial instruments nor an offer or an invitation for an offer. The Underlying’s performance in the past does not constitute a guarantee for their future performance. The financial products’ value is subject to market fluctuation, which can lead to a partial or total loss of the invested capital. No responsibility is taken for the correctness of this information.
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