Gold and silver as uncorrelated assets
7 JAN, 2026
By Ned Naylor-Leyland
By Ned Naylor-Leyland, Investment Manager for Gold and Silver at Jupiter AM
When we talk about gold and silver as uncorrelated assets, there are several points to consider. First of all, gold and silver are monetary instruments or monetary metals; they are not equities or bonds.
The price of gold is not primarily influenced by equity or fixed-income markets. In the case of gold, what matters is interest rate policy set by central banks, and in particular the direction of real interest rates. The price of gold tends to move inversely to the direction of real interest rates, or to the yield of a bond once adjusted for inflation.
If the US Federal Reserve, the most important central bank for financial markets, were to cut interest rates—as is expected in 2026—this would be positive for gold because it would tend to reduce real rates.
Historically, gold has acted as a store of value during times of market volatility, geopolitical instability, and economic uncertainty, and has therefore behaved differently from equities and bonds. In my view, the current bullish trend in gold has been supported by falling real rates, a weaker dollar, and market concerns about the implications of rising levels of US public debt, the cost of servicing that debt, and the impact on US Treasury bonds.
Central banks around the world have increased their gold reserves over the past three years, citing as the main reasons the performance of the yellow metal in times of crisis, its portfolio diversification properties, and its ability to hedge against inflation, according to the World Gold Council’s survey of central banks.
In September, Morgan Stanley’s Chief Investment Officer, Mike Wilson, suggested a 60-20-20 portfolio strategy (60% equities, 20% bonds, 20% gold), which would be a more effective hedge against inflation than the traditional 60-40 portfolio.
