Global Asset Managers Rebuild Gold Positions Amid US Debt Fears

Global asset managers are rebuilding their gold positions after prices retreated from a January all-time high of $5,600 an ounce to near $4,000 in June. Firms including Amundi SA, Pictet Asset Management Ltd., Robeco Institutional Asset Management BV, and Fidelity International Ltd. have increased holdings, viewing the metal as a liquid hedge against macroeconomic uncertainty and a potential US debt crisis.

Investors are driven by fundamental factors, including record second-quarter central-bank purchases and a fading correlation between gold and risk assets. Some strategists, including Bridgewater Associates founder Ray Dalio, advocate for significant gold allocations to protect against fiscal instability and a loss of confidence in the US dollar's credibility as a store of value.

Short-term headwinds persist as Federal Reserve Chairman Kevin Warsh warns that US inflation is not meaningfully slowing toward a 2% target, which contributes to rising Treasury yields. In response to fiscal pressures, Treasury Secretary Scott Bessent has announced increased buybacks of long-dated debt.