HSBC’s Willem Sels and Lucia Ku reiterate a constructive six‑month view on Gold, keeping an Overweight stance. They argue recent headwinds should be short-lived, with fundamentals still supportive. The bank highlights Gold’s role as a portfolio diversifier, especially as cross‑asset correlations rise, and expects safe‑haven demand and central bank buying to underpin prices over the medium to long term.

Safe-haven and diversification appeal highlighted

"Inflation concerns have also led to rate volatility and a repricing of monetary policy expectations. Policymakers are likely to maintain current interest rates for some time before easing later. We continue to seek quality yields from investment grade credit and EM local currency bonds for income generation. However, as cross-asset correlations have increased, we use gold and alternative assets to enhance diversification. Despite the recent pullback, we remain bullish on gold over the medium to long term due to its diversification benefits and safe-haven demand."

"The recent headwinds are expected to be short-lived as underlying fundamentals remain supportive. Gold continues to serve as a compelling portfolio diversifier amid geopolitical uncertainty and central bank buying."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)