Bhanu Baweja, chief strategist at UBS Investment Bank, argues gold’s current bull market, which began in 2018, still has room to rise. The first two gold bull markets (1971–80 and 1999–2011) delivered annualised gains of 46% and 18%, respectively. The current phase has returned 19% annualised so far.

A key shift occurred in February 2022 when Western governments froze Russia’s $630bn in foreign exchange reserves, prompting global reserve managers to question what constitutes money. Emerging market central banks have since increased gold allocations from 5–7% of reserves in 2022 to 11% today, though still below the 26% held by developed-market peers. Despite US five-year real yields rising over 4 percentage points between March 2022 and October 2023—historically implying a 55% gold decline—gold rose 7%.

When real yields later fell less than 1 point, gold rallied 110%, revealing a new asymmetry: gold is now more responsive to falling real yields and less sensitive to their rise. This renders many fair-value models obsolete. Additional drivers include positive bond-equity correlation during recent inflation and the erosion of confidence in US public finances, measured by rising term premium.

Individual and institutional investors still hold only 3% of financial assets in gold, indicating significant room for growth.