Regional Updates

Equities broadly sold off, bond yields rose on the back of a global bond sell‑off, the US dollar strengthened, and oil prices moved higher. Gold has declined from its record highs in mid-January leading to questions about gold’s role as a safe haven. However, this is nothing new – in the early stages of previous crises the gold price also initially fell, partly as investors sold gold to meet margin calls. Historically, as crises drew on, gold recovered to reignite its role as a liquid safe haven asset.

The World Gold Council’s latest markets monitor covers the impact of the current crisis. Gold experienced short‑term pressure amid higher yields, a stronger dollar, and investors reducing ETF and futures positions to meet liquidity needs, but signs of stabilisation have emerged. Prices tested and held key technical support levels, suggesting near‑term consolidation despite ongoing volatility. The report highlights that energy‑driven inflation risks have sharply reduced expectations of central‑bank easing, yet a deterioration in economic or labour‑market data could revive stagflation fears—an environment in which gold has historically performed well. Central bank gold activity remains strategically supportive, reinforcing gold’s medium‑term role as a portfolio stabiliser during periods of geopolitical and macroeconomic stress.

For further infomation, email Andrew Naylor at [email protected].