In this market update, we review the key factors supporting the ongoing investment case for gold. While many investors focus solely on the spot price, our research points to deeper structural drivers—from sustained central bank demand to historic disconnects in gold miner valuations.
This analysis builds on our previous update on gold and gold miners, reinforcing why precious metals remain a core component of our diversified portfolio and tactical asset allocation strategy.
One of the strongest pillars of the current gold trend is not retail speculation, but institutional accumulation. Central banks globally are diversifying their reserves away from fiat currencies and into physical gold. This sustained buying pressure creates a “floor” under the price that supports the long-term trend.
While the price of gold has risen, gold miners have historically lagged behind the metal itself. This has created a valuation gap. We discuss why miners are currently offering attractive entry points and how their embedded operating leverage can offer outsized returns compared to owning the physical metal alone.
Investing in miners often provides embedded exposure to silver, which creates a secondary growth engine for the portfolio. Furthermore, unlike in previous cycles, many producers have limited their hedging (locking in future sales prices). This means as gold prices rise, miners are fully participating in the upside rather than capping their profits.
Gold has long periods of momentum and trend. There is still room to run considering previous bull market performance.
There has been a paradigm shift in gold demand by Central banks since the War on Ukraine and freezing of assets/sanctions on Russia.
Gold miners performance versus gold is at relatively low levels. This is a sign that gold miners still have room to perform given the appreciation in the price of gold.
Producers of gold hedging activity can be a good signal for the future price of gold. Today is a positive sign given the net exposure of hedging is at low levels.
Commodities and precious metals can serve as a powerful hedge against inflation and currency debasement.
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