Weekly Buzz: Gold prices have surged 25% – so what’s next? ✨

5 minute read

Gold is up 25% since December last year, now hovering around US$3,350 per ounce. If you’ve been following headlines, this shouldn’t come as a surprise – when uncertainty climbs, gold tends to shine. So what does history say about what’s next?

What’s driving gold now?

The US Federal Reserve has paused interest rate cuts since December, and history suggests this could keep gold's momentum going. Fed pauses often signal uncertainty, and gold has consistently performed well during these periods – we saw strong rallies in 2002, during the Global Financial Crisis, and again in early 2020 before the pandemic.

A Fed pause is often a signal that policymakers are unsure of the path ahead. Combine that with today’s macro risks – tariff tensions, persistent inflation, and concerns over the US dollar – and you get a recipe for sustained demand for the precious metal.

Several forces could keep the momentum going. Central banks are still buying at record levels, providing a steady demand floor. Meanwhile, gold ETF inflows are rebounding after years of outflows, tightening available supply. With news headlines keeping investors on edge, the appetite for safe-haven assets isn't fading anytime soon.

What does this mean for you?

Gold's performance this year shows why diversification isn't just academic theory. It's not about going all-in on any one asset, but about having a strategic allocation strategy so that when one part of your portfolio stumbles, another can pick up the slack.

Safe-haven assets serve as a hedge against a variety of risks, essentially preparing your portfolio for a wider range of outcomes. Periods of market uncertainty – whether from trade tensions, interest rates, or currency volatility – are simply part of long-term investing. A well-diversified portfolio is built to handle them without the need to constantly react to headlines.

(For a portfolio with strategic gold allocations, check out General Investing. If you want direct exposure to  gold, use Flexible Portfolios.)

💡 Investors’ Corner: Singapore’s new (baby) bull run

The Straits Times Index has surged 23% following Trump’s Liberation Day in April, outperforming both the S&P 500 and regional peers. Maybank calls it a "baby bull" market with more room to run.

Behind the rally is Singapore's pull as a geopolitical safe haven. Amid global tensions we're seeing a flight-to-safety that's particularly pronounced as investors seek politically neutral ground. The Singapore dollar has strengthened 6% against the US dollar this year, and that's created a double boost for investors: protection from geopolitical risk plus gains from currency appreciation.

Meanwhile, the government is taking an active role through its S$5 billion Equity Market Development Program. The program targets Singapore's small and mid-cap segments, where low liquidity has kept valuations depressed. Crucially, it requires fund managers to co-invest their own capital alongside government money, ensuring they have skin in the game.

The economics make sense: just as investors are hunting for places to park their capital, Singapore's government is trying to solve long-standing market inefficiencies to capture more of that flow. It's a combination that's driving both immediate performance and longer-term structural improvements.

(For a portfolio that taps directly into Singapore’s long-term growth, check out Singapore Investing.)

🎓 Simply Finance: Safe-haven assets

When markets get rocky, investors often turn to safe-haven assets – investments that tend to hold their value or even gain during market uncertainty. The classic safe havens include government bonds like US Treasuries, gold, and certain currencies like the US dollar or the Japanese yen.

🗓️ Save the Date

While tariffs and geopolitical tensions dominated the news in H1 2025, income investors benefited from strategic diversification.

Join our webinar featuring Jordan Stewart, Portfolio Manager at J.P. Morgan Asset Management and Nandini Joshi, Deputy CEO of StashAway, who will share the strategic decisions behind income investing success and what's ahead for H2 2025.

Sign up for the webinar happening on 21 August and discover how resilient portfolio positioning navigates market volatility.

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