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Gold is still up 10% since the start of this year. This is despite the major fluctuations earlier this year and the 9% correction after the Iran war wiped out the expected Fed rate cuts. Due to the price increases since 2024, private investors have moved massively into gold, yet their allocation still remains below the long-term average. Nationale Nederlanden Bank is also looking at gold as protection against geopolitical tensions and inflation.
Gold price moves sideways while awaiting a breakthrough in negotiations over the war in Iran
Gold is around 9% lower since the start of the Iran war, but has remained stable for the past month. Since late March, the yellow metal has traded roughly between €128,000 per kilo and €133,000 per kilo. It appears that the gold market has “priced in the current geopolitical risks at current levels; and one would need to see either a severe escalation, or a definitive shift in macroeconomic conditions, to justify price movements,” according to Assiri, analyst at Pepperstone Group.
This means traders are waiting for developments around the Strait of Hormuz before major moves return to the gold market. The risks of the war in Iran for inflation and Fed monetary policy (the U.S. central bank) have already been incorporated into the current gold price. It appears to be creating a situation in which any news suggesting the Iran war may end sooner quickly pushes up the prices of gold, silver and equities, while negative news causes prices to correct again. All of these moves, for now, continue to fluctuate around the same levels.
Investors have moved massively into gold in recent years relative to the recent average share of their total investments. We are therefore looking at gold’s share within their total portfolios. Whereas private investors previously held only 0.5% to 1% of their investments in gold, this rose to 2.16% during 2025. This is shown in the recently published chartbook of the In Gold We Trust report. Looking at the long-term picture, however, we see that a gold allocation of between 3% and 8% is not unusual. Does that historical pattern also directly imply that investors will expand their allocation again and thereby drive the gold price higher?
Allocation to gold versus total investments (equities and bonds) of private investors since 1971 (source: In Gold We Trust report chartbook)
Although it is generally said that a seasoned investor should allocate between 5% and 10% to gold, Morgan Stanley’s Chief Investment Officer went far beyond that with 20%. The head of investments at Morgan Stanley called in September 2025 for the classic portfolio split of 60% equities and 40% bonds to be reconsidered in favour of 60% equities, 20% bonds and 20% gold. The main reasons remain the uncertain future of U.S. government bonds and therefore the dollar, as well as geopolitical tensions around the world.
Comparison of a traditional 60/40 portfolio (blue line) with an adjusted 60/40 portfolio (gold line) with a 15% allocation to precious metals and 10% to commodities, expressed in dollars, source: In Gold We Trust report chartbook.
In Gold We Trust has calculated what an adjustment to your portfolio can achieve. They compared the returns of a traditional 60/40 portfolio with exposure to the S&P 500 and U.S. government bonds with those of an adjusted 60/40 portfolio. In the adjusted portfolio, they included an allocation of 5% gold and 5% silver, supplemented by 5% gold mining shares (HUI) and a 10% commodity index (BCOM). Measured from May 2024, the portfolio with exposure to precious metals shows a result 40% better than the traditional model. This adjusted portfolio appears to have particularly outperformed after U.S. President Trump started his tariff war in February 2025.
Gold price increase in 2025 expressed in each country’s currency, compared with the price increase of equities in those countries (source: In Gold We Trust report chartbook)
Looking back at the rise in gold versus equities in 2025, we see that gold in dollars gained nearly 65%, compared with 16.4% for U.S. equities. In euros, this was a 45% increase for gold versus a 23% increase for German equities. Anyone who bought gold following Morgan Stanley’s advice in September has seen the value of their gold rise from €99,000 per kilo to €130,000 per kilo today, an increase of 31%. Anyone who had entered on 1 January 2026 would, even after all the volatility of recent months, still have seen their gold rise 10% in value.
Also in the Netherlands, we see that after the price corrections in gold earlier this year, banks such as ABN AMRO and Nationale-Nederlanden have been expanding their gold positions again. Nationale Nederlanden sees specific opportunities in gold and renewable energy. The bank’s investment team advises investing in gold as an important form of protection in view of the uncertain outcome of the conflict in the Middle East. “Gold offers strong protection during geopolitical tensions and provides an extra layer of diversification. Gold also partly protects against inflation,” says investment strategist Van der Valk of NN Bank.
Investor with a 1 kg Umicore gold bar at a gold dealer, image by Holland Gold
Investing in physical precious metals can provide important protection against inflation and systemic risks. Physical gold is directly in your possession, comparable to real estate, and is therefore one of the few ways to hold wealth fully in your own ownership without the involvement of financial intermediaries such as banks and brokers. You also eliminate the risks of a counterparty that may fail, such as a bank holding your savings or shares. In addition, savings deposits are only partially covered by deposit guarantee schemes. This remains an important reason to invest in gold or silver during geopolitically and economically uncertain times.
Are you, like many other investors, considering diversifying your portfolio by buying gold? Feel free to contact us to discuss the possibilities. Both private and business clients are welcome, and precious metals can be delivered to your home, collected at the office, or stored safely and fully insured.
