One of the world's oldest asset classes demonstrated its worth again in 2022 and 2023, protecting portfolios when pretty much all other investments tanked. Gold's solid performance thereby defied a strong USD and rising interest rates, usually considered headwinds. Our article explores some of the tailwinds recently enjoyed by the precious metal and explains why we expect its outlook to remain favourable.

• Though the performance of gold over the past two years has been dull in absolute terms, it has been remarkable in the context of a strong dollar and rising interest rates.
• Aside from the surge in inflation, a substantial increase in demand from central banks has likely helped fuel this solid performance.
• In the medium term, central bank demand, greater geopolitical uncertainty, a weakening economy, and the trajectory of US government debt should all continue to support the precious metal.
• We continue to believe in gold as an essential portfolio diversifier and tail risk hedge, offering low correlation to bond and equity markets while protecting wealth against inflation for the long haul.