Gold, at one point dismissed as a zero-yielding relic of bygone monetary eras, is the substance that refuses to die when it comes to banks' portfolios.

The pullback in the price of gold below a recent high near $4,360 per ounce – still 49 per cent higher over 12 months – represents an opportunity to buy back into the metal because drivers of gold remain in place, Standard Chartered says in a note.

The rise in the price of gold has taken place against a backdrop of a lower dollar exchange rate against other currencies (the Dollar Index is down 7.91 per cent year-to-date), central bank buying and concerns sticky inflation in the US and certain other nations. Continued geopolitical worries – wars and tafiffs – tend to work in the “safe haven” asset’s favour.

The “normalisation” of the gold market could continue for a while yet, Standard Chartered Wealth Solutions said in a note.

“It is possible for the current positioning normalisation to take several weeks to fully play out. However, we firmly view this pullback as an opportunity to add, with technical support sitting at $3,945 to $4,060 per ounce. We expect gold to reach $4,500 in 12 months,” the bank said in its November Global Market Outlook document. 

Strikingly, gold is rising while equities have also risen which is unusual. The MSCI World Index of developed countries’ equities returns is 17.21 from the start of this year.

The rise in the gold price – up 113 per cent over the past five years – has reignited debate about its place in high net worth clients' portfolios. The rally in gold during 2025 chimes with the idea that the metal is part of a "vibe shift" in assumptions about the monetary system since the global financial crisis of 2008. Several wealth managers such as UBS and Pictet in Switzerland, and DWS, have been positive about gold in recent months. (See here for a recent story on the market.)

Equities' tug of war
Switching to stocks, the UK-listed bank said there is tension between the positive force of US Federal Reserve rate cuts and economic growth, and the negative force around worries over high valuations, and a weakening US employment market.

“We remain positive. While optimistic investor positioning means the journey from today to year-end may be a more volatile one than we’ve experienced for much of this year, we continue to expect the direction to be positive,” Standard Chartered said. 

“Strong earnings growth and positive earnings revisions remain a cornerstone of our view. Further Fed rate cuts are another factor that should offer support. An overview of quantitative indicators supports this view. For global equities, our short-term quantitative model remains bullish, despite mid-month volatility. Our long-term stock-bond model remains unambiguously bullish due to supportive fundamentals, healthy market breadth and improved DM [developed market] equity valuation after an early month pullback,” it said. 

Regionally, the bank said it remains overweight on the US (led by strong economic and earnings growth) and Asia ex-Japan (led by policy easing and a weak dollar). It prefers equities to credit. “In an environment of elevated valuations across both asset classes, we prefer the relatively less constrained potential upside in equities over corporate bonds,” it said. 

Trade and central bank policy remain key risks, it added.