Gold has surged past $3,500 per ounce, setting a new all-time high and reinforcing its position as the leading safe-haven asset in a year marked by escalating political and economic instability.
For wealth advisors and RIAs, the metal’s historic rally underscores the importance of tactical allocation to alternatives, particularly during periods when core asset classes face broad-based selloffs. Year-to-date, gold has returned more than 30%, outpacing equities, fixed income, and most other commodities.
The latest leg higher in gold prices has been driven by growing investor unease over political risks and mounting concerns about the Federal Reserve’s independence.
President Trump’s increasingly aggressive attacks on Fed Chair Jerome Powell have raised alarms among market participants, who worry about the potential erosion of institutional credibility at the central bank. On Monday, U.S. financial markets responded swiftly to the rhetoric, with equities, Treasuries, and the dollar all declining in concert.
This combination of political interference and deteriorating macroeconomic data has intensified the risk-off sentiment. In recent days, the popular “Sell America” trade has gained traction, pushing investors out of U.S. assets and into gold. ING’s commodity research team noted on Tuesday that gold ETF holdings have climbed to their highest levels since September 2023, reflecting strong institutional demand for portfolio protection.
At 3:35 a.m. ET Tuesday, spot gold stood at $3,473 per ounce, having briefly touched a record $3,500.05. This milestone follows a dramatic acceleration in inflows as investors react not only to headlines out of Washington but also to troubling signs within the real economy. A recent report from the Federal Reserve Bank of Philadelphia showed a steep drop in manufacturing business sentiment, reinforcing recession fears and prompting further rotation out of cyclical assets.
For advisors, the convergence of policy uncertainty and economic fragility is prompting a reevaluation of traditional portfolio hedges. “This convergence of political tension and weakening economic data has pushed investors away from risk assets and into gold,” said Naeem Aslam, chief investment officer at Zaye Capital Markets, in a note on Tuesday. “The drop in the U.S. dollar and equity markets is reinforcing the bullish case for gold.”
This year’s surge has also led several major institutions to revise their forecasts. Goldman Sachs recently lifted its year-end price target for gold by $400, now projecting $3,700 per ounce. The firm cited persistent demand from both retail and institutional investors, growing central bank purchases, and a declining real yield environment as key factors supporting higher prices.
For wealth managers, this shift presents both opportunity and challenge. Gold’s ascent is not just a reflection of short-term anxiety; it also speaks to a broader reevaluation of inflation expectations, currency risk, and global monetary policy credibility. Amid persistent fiscal deficits, geopolitics, and policy volatility, gold has reasserted itself as an effective volatility buffer and inflation hedge.
Moreover, the asset’s low correlation to equities and fixed income continues to offer meaningful portfolio diversification benefits. In client conversations, advisors are increasingly framing gold not as a directional bet on macro conditions, but as a core risk management tool—particularly in light of the evolving relationship between Washington and the Federal Reserve.
Trump’s latest comments on Powell come amid a broader effort to reshape the Fed’s posture on interest rates, which has included public pressure to cut rates more aggressively. While the central bank has thus far resisted political interference, market sentiment suggests that even the appearance of compromised independence is sufficient to undermine confidence in U.S. monetary policy. That erosion, in turn, is finding expression in asset flows.
The dollar, typically the safe-haven of choice during risk-off periods, has struggled under the weight of these concerns. In recent sessions, the greenback has weakened against a basket of major currencies, contributing to gold’s rally. This inverse relationship is being closely watched by investment strategists, particularly those managing global macro and multi-asset portfolios.
Notably, gold’s rally is occurring alongside persistent inflows into physical ETFs, continued strength in central bank purchases, and surging demand from Asian markets—factors that reflect both speculative and structural tailwinds. For RIAs, this dynamic presents an opportunity to revisit gold’s role in client portfolios, especially among risk-averse or long-horizon investors who may benefit from greater exposure to tangible assets.
Gold’s current trajectory also reinforces the broader discussion around alternative investments. As core 60/40 portfolios come under stress amid high correlation between stocks and bonds, allocators are seeking uncorrelated return streams. Precious metals, alongside infrastructure, real assets, and private credit, are increasingly being viewed as essential complements to traditional holdings.
The implications for risk management are significant. With volatility expected to persist and policy unpredictability likely to remain elevated through the election cycle, wealth advisors may need to look beyond passive hedging strategies. Active management of inflation hedges, currency exposure, and tail-risk insurance is becoming a more critical part of client conversations.
In that context, gold’s outperformance is serving as a case study in real-time market psychology. The metal’s rise is less a function of bullish sentiment and more an indictment of the perceived fragility of current policy frameworks. With government spending still elevated and real interest rates under pressure, gold is increasingly being priced as a form of default hedge.
Advisors should also remain aware of the potential for reversals, particularly if the Fed signals a firmer commitment to its inflation-fighting mandate or if geopolitical tensions recede. But with structural tailwinds—such as declining global trust in fiat currencies and rising systemic debt—gold’s long-term narrative remains compelling.
RIAs should consider proactive allocation strategies, including dollar-cost averaging into gold positions, using options to hedge volatility, and integrating precious metals exposure via ETFs, physical holdings, or gold mining equities, depending on the client’s risk tolerance and liquidity needs.
The strategic rationale for gold also intersects with the need for tax efficiency in client portfolios. Gains from gold ETFs are typically taxed at the collectibles rate of 28%, though gold-related mutual funds and separately managed accounts may offer different tax profiles. RIAs should factor in these considerations during rebalancing or tax-loss harvesting exercises.
Looking ahead, the broader macroeconomic outlook will remain central to gold’s pricing. If Fed credibility continues to erode and inflation expectations reaccelerate, demand for tangible stores of value is likely to persist. Should geopolitical risks increase or capital flight from U.S. markets accelerate further, gold could see additional upside, potentially testing Goldman’s revised forecast.
Ultimately, gold’s record-setting run in 2025 is emblematic of investor unease, but also of the enduring value of diversification and proactive asset allocation. For wealth advisors, the key lies in translating market dislocation into opportunity, offering clients not just protection, but positioning that reflects the realities of an evolving global financial landscape.
