Real Assets

Runaway Gold

Since bottoming at around $1,630/oz in October 2022, the price of gold has increased by more than 150%.1 Among the more remarkable aspects of this rally is that it has occurred amid mostly rising interest rates, historically a headwind for the gold price, suggesting other factors are at play.

It’s been our experience that the gold market can sometimes serve as the metaphorical canary in the coalmine, sussing out potential dangers before they manifest in asset prices more broadly. One such danger, in our view, has been the massive and ongoing accumulation of government debt.

The US federal deficit, for example, remains historically outsized relative to the unemployment rate—as it has since the outbreak of Covid-19.2 This persistent deficit spending has imparted some positive nominal drift to the economy, which has trickled down into corporate earnings, margins and supported risk assets. We believe it also helps explain the decoupling of gold and Treasuries shown below.

Gold—whose relatively fixed supply historically has enabled it to participate in the nominal drift of the economy over time—appears to be acknowledging the double-bind facing US policymakers: Do nothing to address the deficit and increase the risk of inflation, or take action to curb deficit spending and increase the risk of recession.

Gold and Treasuries Exhibit

1 Source: World Gold Council; data as of November 30, 2025.
2 Source: Haver Analytics, Bureau of Economic Analysis, US Treasury, Federal Reserve Bank of St. Louis; data as of October 30, 2025.

The opinions expressed are not necessarily those of the firm. These materials are provided for informational purposes only. These opinions are not intended to be a forecast of future events, a guarantee of future results or investment advice. Any statistics contained herein have been obtained from sources believed to be reliable, but the accuracy of this information cannot be guaranteed. The views expressed herein may change at any time subsequent to the date of issue hereof. The information provided is not to be construed as a recommendation to buy, hold or sell, or the solicitation or an offer to buy or sell any fund or security.

Past performance does not guarantee future results.

Risk Disclosures

All investments involve the risk of loss of principal.

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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