Institutions boost gold holdings as portfolio models shift and mining stocks outperform expectations
Gold prices could reach unprecedented heights in the coming years, with some analysts forecasting a surge to US$8,600 by 2028 as global debt risks and weak bond markets drive investors toward metals, according to BNN Bloomberg.
This shift is underpinned by what industry leaders describe as a “monetary regime change,” where central banks and institutional investors are rethinking portfolio strategies and increasingly favouring gold over traditional fixed income assets.
David McAlvany, CEO and portfolio manager at McAlvany Financial Group, told BNN Bloomberg that the industry is witnessing the early stages of a multi-year shift in asset allocation.
He noted that Western investors are beginning to show renewed interest in metals and miners, with Orla Mining’s strong third quarter serving as a clear example of this trend.
McAlvany highlighted that Orla’s fair value could rise as gold prices climb, especially with the company’s South Railroad project in Nevada poised to become a transformative asset.
Institutional and retail investors alike are increasing their gold allocations as fiscal imbalances and central bank buying set a higher price floor for the metal, reported BNN Bloomberg.
McAlvany explained that the traditional 60-40 portfolio model is evolving, with some major asset managers now recommending a 60-20-20 split that allocates a substantial portion to gold.
He emphasized that even a modest shift from zero to five percent gold exposure among endowments and pension funds marks a significant change in market dynamics.
The appeal of gold is further reinforced by recent market movements.
Reuters reported that gold prices climbed Wednesday 2 percent to US $4,208.98 per ounce as US Treasury yields slipped, following anticipation of a government reopening and expectations for a Federal Reserve rate cut.
Non-yielding gold, which tends to outperform in low-interest-rate environments and during economic uncertainty, is benefiting from these conditions.
Silver and other precious metals have also seen notable gains, with silver rising 4.6 percent to US$53.58 per ounce.
As the fascination with technology stocks wanes, many investors are reallocating toward commodities.
McAlvany pointed out that mining shares have outperformed, with gold and silver up 50 to 70 percent year to date and mining stocks climbing even higher.
He credits Orla Mining’s conservative management and focus on North American assets as key differentiators, suggesting the company is well-positioned to benefit from ongoing shifts in the global financial landscape.
With global debt levels rising and traditional bonds under pressure, the case for gold as an “anti-fragile asset” is gaining traction among sophisticated investors, as reported by BNN Bloomberg.
