By Randall W. Forsyth
Gold has been one of the biggest beneficiaries of the financial and geopolitical ructions of the past year, vaulting from one record to the next and soaring nearly 80% from late last January, according to Dow Jones market data. And since the turn of the year, what has been derided as a pet rock is up 13.5%, topping $4,900 an ounce on Thursday.
The events this past week surrounding the U.S. threats of a less-than-friendly takeover of Greenland were only the latest boost to bullion. And while global equity markets recovered from their brief swoon once President Donald Trump said on Wednesday that he had reached "the framework of a future deal" with the North Atlantic Treaty Organization over the Arctic island, gold continued its advance even after a return to what passes for normality these days.
As a result, market analysts are being forced to hike their price targets. For instance, Goldman Sachs this past week hiked its year-end target to $5,400 an ounce from $4,900. When the price action outraces forecasts, it's often a sign of a bull market getting ahead of itself. Only the frothiness in its junior cousin, silver, has been more extreme, which my colleague Ian Salisbury wrote this past week "may be a reason to steer clear."
But to one longtime gold bull, the case for the precious metal remains intact. John Davi manages the Astoria Real Assets exchange-traded fund, whose aim is to provide an inflation hedge as part of a diversified portfolio. Unlike gold specialty funds, the ETF's ticker, PPI, indicates that it can address an array of stakes tied to inflation, ranging from energy to real estate and utilities.
But the fund's biggest concentration remains in gold. That includes 10% in the SPDR Gold MiniShares ETF, plus 6.5% in miners Newmont and AngloGold Ashanti. And even with the precious metal's record run, Davi said in an interview that he's "more and more bullish" because of great concerns about the dollar's status as a reserve currency.
As central banks sell their U.S. bondholdings, gold is the natural destination for those funds, he added. And according to recent data, central banks' gold stashes have topped their holdings of Treasuries, $36.8 trillion versus $31.6 trillion.
None of which is new. Indeed, Davi traces his bullishness on the metal back to 2020, when the U.S. money supply started to skyrocket from the Federal Reserve's quantitative easing. Now, talk of the U.S. acquiring Greenland has only added to worries about the size of the U.S. debt load, while the One Big Beautiful Bill Act added more gasoline to the fire, he added.
Davi agrees with Bridgewater Associates founder Ray Dalio's recommendation of holding up to 15% of a portfolio in gold as a hedge for the other 85% in equities. The fund also owns Bitcoin but has three times as much gold, since its long history provides more downside protection (although he thinks crypto has more upside.)
Davi also is a fan of other real assets, including rare coins and even sports memorabilia. That's preferable to owning "nominal assets," given the dollar's loss of 52% of its value over the past 30 years, he added.
All of that is apart from the move away from the dollar internationally, but in the absence of a viable alternative, gold is once again seen as real money rather than a barbarous relic.
Write to Randall W. Forsyth at randall.forsyth@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 23, 2026 12:08 ET (17:08 GMT)
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