Gold crossed $5,000 per ounce in January 2026, reaching an all-time high of $5,595 per ounce on January 29 – driven by central bank demand and a tense geopolitical backdrop. Two months later, at the height of the Middle East escalation, the metal lost more than 20% from that record, falling below $4,300 on March 23. For many savers who had relied on gold as a shield, then it’s the cold shower. How to explain it?
In reality, when a conflict raises fears of lasting inflation, the markets anticipate that central banks will raise their key rates. Higher rates make bonds more attractive than gold, which pays neither dividends nor interest. At the same time, the dollar is strengthening, which penalizes gold quoted in this currency. And investors who had accumulated long positions were forced to sell their winning positions to cover their losses elsewhere. But then, what should we think of the “safe haven” reflex in the current, very uncertain context?
Why was gold considered a safe haven?
Historically, gold provided real decorrelation to portfolios – global stocks and government bonds. Over the last fifty years, it is one of the rare asset classes to have shown a positive correlation with inflation, and it has often helps cushion shocks on the stock markets. Its annualized performance since the 2000s has been around 8%. However, gold does not pay any coupons or dividends. Its profitability depends solely on the price variation, which can be violent in both directions, as we have just seen.
But if gold resists when stock markets plunge, it does not automatically rise either. The mechanics are finer than that. This is also the opinion of Maxime Kugler, responsible for the financial offer at Altaprofits. “ Gold is not a guarantee against crisesbut it is an asset that tends to help stabilize a portfolio in times of stress”. Stabilize, not protect. It’s not the same thing.
Diversification, always essential
What does our expert advise, then? “I don’t see gold as a short-term bet in a crisis, but rather as a a pocket of diversification. The idea is to have an asset that can react differently from the rest of the portfolio”he specifies.
The rule commonly accepted by wealth advisors is to limit the allocation to 5 or 10% of one’s total assets. Beyond that, we expose ourselves too much to the volatility of the metal and its lack of current yield. And after an increase of 50% in one year, the risk of profit-taking remains high: an increase in the Fed’s key rates would automatically make government bonds more attractive than gold.
If you want to buy gold, you have the choice between physical gold (coins or bars) which offers you the tangible, “real” side of the metal – but requires knowing where to keep it, which could incur storage costs, insurance, etc. Otherwise, there is “paper gold”, which brings together ETCs (trackers which replicate its price) or other funds backed by the metal, which have the advantage of simplicity.
