Real Assets

Gold Still Worth Its Weight

Precious metals experienced a significant correction on Friday, January 30, with gold (-8.95%) and silver (-26.36%) posting their largest single-day percentage declines in history.1

Despite this selloff and subsequent volatility in these markets, we believe the structural role of gold bullion and gold-related securities as a potential hedge remains intact—and perhaps more important than ever—given rising global debt levels, ongoing fiscal pressures, and persistent monetary and geopolitical uncertainties. As illustrated by Friday’s price action, however, disciplined security selection and appropriate position sizing are paramount.

The immediate catalyst for Friday’s selloff was the nomination of Kevin Warsh as the new Federal Reserve chair, set to replace Jerome Powell in May 2026. The choice of Warsh was viewed as less dovish and more supportive of Fed independence than widely anticipated, which weighed on the debasement trade and sparked an extreme reaction in gold and silver markets that appeared short-term overextended following strong rallies.

We believe it is important for investors to keep the decline in perspective. While Friday’s selloff was large, it merely sent the price of gold and silver back to peaks established earlier this year.2  Meanwhile, in our view, gold’s valuation continues to look reasonable on a historical basis relative to the stock of US public debt or equities.

Corrections, in our view, are a natural and healthy development following strong upward moves in price, helping flush out excess froth in the market while creating attractive opportunities for disciplined investors. Though painful in the short term, corrections do not necessarily undermine long-term investment theses. The 1987 stock market crash is a classic example; while the S&P 500 sold off 28.5% over the course of several days in October, it did not derail the broader structural bull market in equities that spanned from 1980 to 2000.3

While we won’t hazard a guess at the short-term direction of gold prices, we are confident in the metal’s value as a potential hedge amid an increasingly complicated investment backdrop.

1Source: Bloomberg; data as of January 30, 2026. 

2Source: Bloomberg; data as of January 30, 2026. 

3Source: Bloomberg; data as of January 30, 2026.

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Investment in gold and gold-related investments present certain risks, including political and economic risks affecting the price of gold and other precious metals like changes in US or foreign tax, currency or mining laws, increased environmental costs, international monetary and political policies, economic conditions within an individual country, trade imbalances and trade or currency restrictions between countries. The price of gold, in turn, is likely to affect the market prices of securities of companies mining or processing gold and, accordingly, the value of investments in such securities may also be affected. Gold-related investments as a group have not performed as well as the stock market in general during periods when the US dollar is strong, inflation is low and general economic conditions are stable. In addition, returns on gold-related investments have traditionally been more volatile than investments in broader equity or debt markets. Investment in gold and gold-related investments may be speculative and may be subject to greater price volatility than investments in other assets and types of companies.

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