Incrementum AG has shaken up the gold market with its new playbook, signaling a paradigm shift that investors must follow to navigate the evolving landscape of precious metals. In their annual In Gold We Trust report, the Liechtenstein-based investment firm highlighted structural changes in the global economy that are driving renewed demand for gold as a neutral asset on the world stage.
The report, led by fund managers Ronald-Peter Stöferle and Mark J. Valek, points to the end of the Great Moderation Trade and the rise of inflation volatility as key factors influencing the gold market. With inflation proving to be more enduring than previously thought, and geopolitical uncertainties rattling global markets, gold has emerged as a safe-haven asset for investors seeking stability in uncertain times.
Notably, gold prices have soared to record highs above $2,400 an ounce this year, defying traditional headwinds and outpacing other asset classes. The report forecasts gold prices to reach $4,800 an ounce in the next six years, underscoring the long-term potential of the precious metal.
Central banks have played a pivotal role in supporting gold demand, seeking a neutral asset amid the shifting economic landscape. With emerging market central banks and retail investors driving demand, gold has cemented its position as a strategic asset in portfolios worldwide.
While risks such as higher interest rates and stock market crashes loom, Incrementum advises investors to consider a more balanced portfolio that includes physical gold bars and coins. As the traditional 60/40 portfolio allocation comes under pressure, gold offers a hedge against economic instability and inflation, making it an essential component in today’s investment landscape.
