CIO unpacks his view that so long as uncertainty persists, gold should maintain its appeal to investors
The rising value of gold feels almost inexorable at this point. In the past month, the yellow metal has picked up by almost nine per cent, rising above $3,600 (USD) per ounce. It has risen more than 25 per cent in the last month and over 44 per cent in the past year. More recently, mining firms took up 17 spots on the 2025 TSX 30 list, reflecting a growing demand for gold price exposure among Canadian investors, either through the ownership of bullion or gold equities.
Sadiq Adatia, Chief Investment Officer at BMO Global Asset Management, explained that gold’s rise has been underpinned by an increasingly uncertain world. As that uncertainty has continued a number of retail, institutional, and state buyers have sought out gold exposure, driving prices higher. He weighed in on the sustainability of this trend, arguing that so long as the world remains uncertain gold will still play a role providing ballast and diversification for investors.
“If we ask ourselves what the point is where we think we're going to get out of gold, we don't actually have a set number at this time,” Adatia says. “It really is about what's going on in the economy and what is there from a potential uncertainty standpoint. As long as those factors remain in place, we're probably going to have gold sitting in our portfolio.”
The latest upward surge in gold prices, Adatia says, has the same core drivers as the past run seen since 2023 when gold began to break out of its historic range. Central banks, especially in emerging markets, have bought large quantities of gold as part of concerted de-dollarization policies. Retail buyers in markets like India have bought large quantities of bullion while retail investors in North America have picked up interest. All of this has been underpinned by uncertainty about global trade policy and geopolitics.
That relationship to uncertainty, Adatia highlights, was shown in the aftermath of the ‘liberation day’ tariffs, when markets digested some of President Trump’s concessions after the initial announcement. As the TACO (Trump Always Chickens Out) trade took hold, gold’s appreciation paused slightly, only to resume as new layers of uncertainty were introduced in the form of sectoral tariffs and unrealized final deals. BMO GAM’s own stance shifted from neutral back to bullish in that period.
The increasing popularity of TSX-listed gold mining equities, Adatia explains, stems from the near-constant improvement in investor appetite for gold. The popularity of the commodity itself has investors seeking different forms of leverage to gold price, one of which can be found in gold miners. Investors who may be experiencing some FOMO or even having lagged returns for want of a meaningful gold exposure may be trying to make up that gap through gold miners. Adatia doesn’t believe that the run in gold miners is tied to the actions taken by a particular company. Instead, a rising tide appears to be lifting all boats. Moreover, with many lower cost means of accessing bullion price directly now available on the market, investors in gold equities aren’t making that choice because of a prohibitively expensive commodity price, in his view.
While Adatia notes that Gold’s rapid appreciation may pause or slow in future, he argues that the ongoing global consensus is supportive of the asset class in the long-run. He notes that persistent questions about geopolitical stability, tariffs, and central bank policy are driving investors towards gold exposure as a means of defensive positioning.
The risk to Adatia’s outlook, he notes, is that global uncertainty could pull back. Rate cuts might stimulate stronger GDP growth and the US administration might face greater checks on its power, all of which might lend itself to a narrative of global stability. That, in turn, would erode some of the appetite for gold among investors. In the meantime, Adatia notes that advisors can talk to clients about how gold has behaved in the context of changing economic, geopolitical, and investment realities.
“One of the risks that has played out over the last few years is bonds were supposed to be your mitigator against equity risk, but, unfortunately, bonds have become a lot more correlated to equities,” Adatia says. “What we've seen is gold has been a much better hedge, a much better way to protect your equity side of your portfolio. So in this current environment while the correlations are still high with equities and bonds. We think it makes sense to have an allocation towards gold to deal with that.”
