We have been fielding a number of discussions regarding our position to be overweight gold and selective commodities. To help provide some perspective on this we have outlined our view of where we are in the cycle below.
The price of gold has reached a record US$4,176/oz, while silver has surpassed its 1980 Hunt Brothers peak, now trading above US$53/oz. Gold is up more than 55% year-to-date, making it the best-performing asset class of 2025.
Key drivers include:
Central banks continuing to increase gold reserves as an alternative to US Treasuries and the dollar
The Fed’s renewed rate-cutting cycle
Persistent inflation concerns linked to tariffs
The recent US government shutdown, which has frozen key economic data releases and heightened uncertainty
Despite this record run, miners remain under-owned. Mining’s share of global equities is at its lowest level in over 120 years.
Recent developments underscore the growing strategic importance of key minerals:
Further Chinese restrictions on rare earth exports
The takeover of Toro Energy in WA, despite Australia’s current uranium ban
Morgan Stanley’s recommendation of a 20% portfolio allocation to gold, noting bonds are failing as a traditional hedge
Reports that BHP is now transacting roughly 30% of its iron ore sales in Renminbi
Persistent queues outside ABC Bullion, reflecting growing retail demand for physical gold—this signal’s not a bubble, but deep distrust in sovereign debt and government control
UBS highlights that post-Russia sanctions, capital has increasingly shifted away from US bonds and bills toward assets less vulnerable to sanction risk—especially gold. Nations such as China, Russia, India, Iran, and Brazil are trading bilaterally and settling excess reserves in gold rather than US dollars. Given that the global commodities market is 10–15 times larger than the gold market, the medium-term upside remains considerable.
Private investor allocations to gold remain minimal, suggesting we are still early in the bull cycle. Valuations of gold miners also remain attractive, with majors like Newmont only recently added to UBS’s preferred list. Many producers are unhedged and enjoying widening margins as oil prices fall.
I remain significantly overweight gold and strategic commodities while the following conditions persist:
The US dollar remains in a medium-to long-term downtrend
Speculative positioning in gold and silver markets is not excessive
ETF demand remains strong but not extreme
Inflation stays elevated, growth remains subdued, and volatility increases
Holding through a strong bull trend is never easy, and volatility should be expected. However, several major market participants are yet to join—pension funds (slow to rebalance), active fund managers (likely to chase beta), and retail-heavy index funds (reactive to headlines). Only when themes like “US dollar debasement” dominate the media will the broader public fully engage.
Hold tight and expect swings, but the structural case remains firmly intact.
Stay informed with our team’s exclusive complimentary market insights and strategic updates. Click this link to join our distribution list.