‘A good hedge and reasonably liquid’: World’s biggest money managers are rebuilding gold positions

[SINGAPORE] Some of the world’s biggest money managers have rebuilt their gold holdings after prices dropped, betting that long-term drivers of the precious metal will endure even as the US Federal Reserve takes a more assertive stance on inflation.

Amundi, Europe’s largest asset manager, bought bullion on the expectation it will return to US$5,000 an ounce by the end of 2026.

Fund managers at Pictet Asset Management, Robeco Institutional Asset Management and Fidelity International also added to holdings cut earlier in 2026, during bullion’s retreat from an all-time high.

“Gold is an asset that we consider to be cheap, a good hedge and reasonably liquid,” said Lorenzo Portelli, head of cross-asset strategy at Amundi Investment Institute.

But greater visibility over the Fed’s interest rate path would be needed, he said, before the firm would consider adding to August’s purchases.

That was a common theme in interviews with more than a dozen asset managers, whose firms manage a combined US$27 trillion.

Without exception, each of them – including BNP Paribas Asset Management and Manulife John Hancock Investments – had either added back gold in recent weeks or were maintaining bullish allocations.

But any breakout above gold’s recent ceiling near US$4,600 an ounce will not be smooth, many of the money managers said.

Higher Treasury yields and increased bets for at least one Fed rate hike before end-2026 are undermining support for bullion, an asset that tends to be less favoured when borrowing costs rise, because it does not pay interest.

Investors’ resolve was tested by Fed chairman Kevin Warsh’s Aug 28 speech at the central bank’s Jackson Hole symposium, where he warned that US inflation is not meaningfully slowing toward a 2 per cent target – comments that triggered increased bets on monetary tightening.

So far, these potential speed bumps have not shaken the renewed conviction of long-term investors. Gold’s enduring appeal, some of the money managers said, lies in its value as a hedge within a broader investment portfolio.

“It’s become a much more acceptable asset,” said Arnout van Rijn, a portfolio manager for multi-asset and equity solutions at Robeco, a Dutch firm that oversees some US$464 billion in assets.

“It’s become part and parcel of every regular or normal portfolio.”

Retreat presented ‘good buying time’

After a blistering rally backed by speculative capital took gold to an all-time high near $5,600 an ounce in January, the metal has spent much of 2026 in retreat.

Elevated energy prices and inflationary shocks from the Iran war dragged it back to near US$4,000 in June. That is when funds began to show interest.

“The downdraft to US$4,000, if you didn’t own it already, was a very good buying time,” said Michael Cuggino, president of the Permanent Portfolio Family of Funds.

“The long-term macro story is still in place, and that’s bullish for gold,” he said, adding that “higher highs and higher lows” could be expected over time.

For Robeco’s van Rijn, the catalyst for buying gold again was an acceleration in central bank purchases during the second quarter.

Official sector demand recovered sharply between April and June, with net purchases of 289 tonnes the highest for any second quarter, according to the World Gold Council.

Sophie Huynh, a portfolio manager and strategist for dynamic-asset allocation at BNP Paribas, was drawn back by a fading correlation between bullion and risk assets like equities – a trend that suggests gold’s traditional value as a hedge has returned after a period of speculative trading.

“The froth of gold has come off,” said Huynh. Instead, the metal is being powered by “fundamental drivers such as central bank purchases and multi-asset managers looking for portfolio hedge”, she added.

That renewed appetite for gold is reflected in funds’ net-long position tracked by the Commodity Futures Trading Commission, which rose in the week ended Aug 25 to its highest level so far in 2026.

In one of the starkest warnings of recent weeks, Ray Dalio, the billionaire founder of Bridgewater Associates, said investors should reduce their bond holdings and put as much as 15 per cent of their money in gold to hedge against the risk of a US debt crisis.

His comments came as long-term US Treasury yields rose to multi-year highs, a trend that prompted US Treasury Secretary Scott Bessent to announce more buybacks of long-dated debt.

The unexpected move caused gold to spike and revived interest in the so-called debasement trade – like central bank buying, another pillar of gold’s 2025 rally.

“You’re seeing money move out of the US dollar and into hard assets – gold, Bitcoin being some of that – because there’s a loss of confidence in our fiscal credibility,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial, referring to the US.

Bullion’s recent recovery, added Kevin Khang, head of global economic research at The Vanguard Group, “is very consistent with people being concerned about the US dollar again as a store of value”.

Some of the asset managers interviewed by Bloomberg News said alarm around the world’s dominant reserve currency was overstated, but most agreed that a steady shift towards more diversified portfolios would provide a lasting platform for bullion to appreciate.

Though there is “no obvious replacement” for the US dollar, according to Christopher Hamilton, head of client investment solutions for Asia-Pacific at Invesco, that does not prevent investors from “increasing diversification at the margin”, which may prove to be a more sustainable trend than any dramatic shift.

Gold, after all, makes up a relatively small share of Western investors’ portfolios, particularly after years of stunning gains in US equities. That means that even modest diversification has the potential to move bullion prices sharply.

And no matter how the Fed tries to tackle inflation – and the effect of these efforts on the gold price – investors are still inclined to hold bullion as a counter to macroeconomic and geopolitical uncertainty, said Tracy Chen, a portfolio manager at Brandywine Global Investment Management.

Gold “should still hold value as a hedge against what the Fed can’t control”, she said. BLOOMBERG