Gold remains an “anchor” in a diversified portfolio - FTSE Russell’s Indrani De

FTSE Russell’s Indrani De argues gold remains a portfolio “anchor” despite recent volatility and its failure to draw a classic safe-haven bid during periods of heightened geopolitical stress. Her core view is that the metal’s long-term diversification role is intact, but short-term price action is now being dominated by competing macro forces: geopolitics and inflation on one side, versus higher opportunity cost from rising rates on the other. De said the Middle East conflict has lifted oil prices and revived inflation fears, which in turn is reinforcing expectations that central banks may need to keep policy tighter for longer. That raises the cost of holding a non-yielding asset like gold. She also noted that gold’s rally earlier in the year to an all-time high of $5,600 has made it behave more like a financial asset, with sharper profit-taking and greater sensitivity to liquidity conditions, especially when investors move toward cash. From a portfolio perspective, De’s message is that the recent underperformance does not indicate a structural break in gold’s role. Rather, she sees the market repricing broader asset classes, with gold moving broadly in line with global equities. In her view, the current setup increasingly resembles a stagflationary backdrop: weaker growth signals from industrial metals such as copper alongside persistent inflation pressure from energy, which could eventually restore demand for gold as a defensive allocation. Near term, the key catalysts are oil, rates, and broader risk sentiment. If inflation expectations keep rising and growth data softens, gold should regain traction as a hedge and diversification tool; if central banks stay hawkish and liquidity remains tight, the metal may continue to trade as a risk asset and struggle to reassert a safe-haven premium.