The rise in the price of gold – that most classic of safe-haven assets – continues. Brokers and wealth managers wrestle with the implications.

Gold’s surge in recent months, fuelled by concerns about geopolitics and weaker US dollar, has continued, rising above $5,000 per ounce. International tensions and macroeconomics continue to drive the price and embed its role as portfolio “insurance”. The performance of the metal is another reminder why it retains status as portfolio insurance for high net worth and ultra-HNW individuals.

Concerns about a clash between the US and Europe over a potential American move to buy Greenland (currently an autonomous territory of Denmark) appeared to have declined somewhat following the World Economic Forum gathering of political and business leaders in Davos, Switzerland, last week. 

But while anxieties may have eased, the safe-haven attractions of gold remain lustrous.

“While gold is up at a record high, the market does generally feel slightly calmer than it did before WEF,” Lucy Smith, investment manager at Killik & Co, the stockbfroker and wealth manager, said in a note. “Investors were relieved when [US President Donald] Trump – in his own signature way – slowly stepped back from military action in Greenland, and this directly correlated with defence funds, with iShares Global Aerospace & Defence falling 3 per cent by the end of the week. This money didn’t all flow back into equities, however, hence the gold price rise.”

Smith said threats of US tariffs on Europe as part of Trump’s stance is an “immediate and significant risk for investors.”

Longer term, she said, “investors will likely continue to diversify away from US assets and the most obvious destination for that cash is across the pond to Europe, or even away from equities entirely to de-risk portfolios.”

“This movement of capital away from the US is likely to cause damage in the States on the long term, but given the scale and significance of the US economy, it’s unlikely to budge them as the global hegemon. The biggest takeaway from all this is that geopolitics will continue to define global markets,” Smith said. If middle-rank countries push back against the US on trade and foreign policy, it will make markets more volatile and will drive gold higher.

Private banks, such as Switzerland’s Union Bancaire Privée, have boosted allocations. As reported here, Peter Kinsella, head of investment services UK at UBP, said the bank had increased its exposure to gold to 7 per cent. Fellow Geneva-headquartered bank Lombard Odier, for instance, sees limited mining capacity pushing up gold prices in 2026, supporting its preference for the materials sector within equities. See more here.  As reported here, Daniel Casali, chief investment strategist at UK wealth manager Evelyn Partners, has argued that the surge in gold prices demonstrates a “clear preference for security over returns.” 

Chris Beauchamp, chief market analyst at IG, the trading platform, said that gold’s rise began because of central bank buying, but it has become one of the “most spectacular momentum trades of recent years, made all the more impressive as bitcoin continues to struggle.” 

“But with limited sources of fresh supply gold's scarcity means it could go much further, even if some caution is required here – it has been months since we saw any sustained losses for precious metals, and the price continues to look vulnerable should upward momentum falter,” Beachamp said. 

Lale Akoner, global market analyst for eToro, a financial trading business, said that gold is being increasingly used to hedge equity risk, displacing the role that long-dated government bonds used to perform. The old idea of bonds offsetting the performance of stocks no longer applies.

“Historically, duration exposure helped cushion drawdowns in risk assets. But recent episodes, where equities and long bonds have sold off in tandem, have undermined confidence in bonds as a reliable hedge at the very moments investors expect them to do the heavy lifting,” Akoner said.

This publication recently interviewed John Reade, the senior market strategist for Europe and Asia at the World Gold Council, about his views on what is driving the gold price.