Multi-Asset Insights

Markets are repricing three structural narratives—gold as a safe haven, the dollar’s reserve dominance, and just-in-time supply chains—as their limits become more visible.

• Gold fell more than 20% peak to trough after the outbreak of the war in Iran, but comparable drawdowns occurred repeatedly during its three major secular bull markets over the past half-century, including declines of 30–40% during episodes such as the global financial crisis.
• Gold’s correlations with equities and the US dollar have varied across the dotcom crash, the 2008 crisis and the pandemic, making it a useful long-term store of value but an unreliable systematic short-term hedge.
• The dollar remains supported by deep capital markets, liquidity, legal infrastructure and the Federal Reserve, while the military pillar of its reserve status is being questioned; US defence stocks rose 35% in 2022 and European defence stocks 80%.
• Cross-border renminbi settlements have increased by more than 300% since 2013, equivalent to roughly 12% annual growth versus 4.6% for China’s total trade, although the currency accounted for only about 3% of SWIFT payments.
• The shift toward “just-in-case” supply chains has supported copper, industrial metals and mining equities, with the S&P 500 metals and mining sector gaining more than 100% over the past year; persistent stockpiling could also alter commodity term structures and the attractiveness of carry strategies.

Takeaway: Investors should treat gold as volatile reserve diversification rather than a guaranteed safe haven, recognise that dollar diversification is becoming more credible without implying imminent de-dollarisation, and consider the longer-term portfolio effects of resilience spending on commodities and real assets.