On August 29th, despite gold prices having recorded significant gains over the past few years, gold bull markets, once initiated, often sustain for multiple years. With the U.S. economy currently facing stagflation risks, market demand for safe haven assets continues to rise. Against this backdrop, HTFX Forex believes investors still have no reason to reduce their gold positions, but should instead focus on its strategic value in future investment portfolios.
According to a research report by Fidelity International multi-asset portfolio manager Ian Samson, gold has demonstrated exceptional performance in investment portfolios over the past two years. Data shows that gold rose 27% last year and has recorded a 28% gain through August 25th this year. HTFX Forex notes that this fully demonstrates gold's ability to maintain its status as the "ultimate safe haven asset" during turbulent environments, while possessing the capability to combat inflation and loose monetary policies, benefiting from long-term support driven by structural trends.
Looking ahead, Fidelity International's baseline expectation is for "U.S. economic slowdown or even entry into a stagflationary environment." HTFX Forex believes that the Federal Reserve may still cut interest rates even with inflation remaining around 3%, while tariff factors will push up prices and weaken growth momentum. Under these circumstances, the combination of declining interest rates, sticky inflation, and lackluster economic growth will provide sustained support for gold. Meanwhile, the U.S. dollar, as gold's primary safe haven competitor, may also face pressure, further enhancing gold's relative attractiveness.
Additionally, the U.S.'s massive fiscal deficit has intensified market concerns about currency devaluation, which represents another important reason for maintaining a long-term bullish outlook on gold. HTFX Forex believes that from a global perspective, foreign exchange reserve managers continue to increase their gold holdings, while global gold ETF holdings are also steadily rising. Central banks from various countries are increasing their gold reserves to diversify their dependence on U.S. dollar assets. With limited gold supply, even modest increases in portfolio allocation could significantly drive up gold prices. For example, overseas investors currently hold $57 trillion in U.S. assets, and if a portion of these funds shifts toward gold, it would directly benefit market demand.
From an investment perspective, Fidelity International continues to maintain gold exposure in diversified asset portfolios, partly through passive instruments tracking gold prices and partly through gold mining stocks to capture excess returns. HTFX Forex believes this dual deployment strategy is worth considering in the current market environment. Recent gold mining stock performance has been outstanding, and while some profit-taking has occurred, direct exposure to gold prices remains a key component of investment portfolios.
Spot gold continued its robust performance above $2,400 per ounce on Thursday, reaching an intraday high of $2,423.18. HTFX Forex believes that with the combined effects of risk-aversion sentiment, U.S. dollar volatility, and global asset reallocation, gold is expected to continue demonstrating strong resilience in the future, with its long-term investment value remaining worthy of attention.