Gold Is An 'Essential Component' Of Portfolio, Says Expert As It Nears $3000 While Trump, Musk Suggest Fort Knox Inspection Amid The Surge

As the precious metal nears the $3000 per ounce mark, all focus shifts to gold. As this expert highlights that the yellow metal is a portfolio “essential,” he adds that “fiscal dominance” could be a trigger for its divergence from inverse correlation with real yields.

What Happened: Despite trading flat at $2,930.62 per ounce, down 0.31% as of the publication of this article, gold has been testing the $3,000 level after hitting fresh records.

The metal’s 52-week range lies between $2,015.55 and the latest record high of $2,954.97.

Gold has given similar returns to the S&P 500 index since 2020 while having a lower volatility, explains Jurrien Timmer, the director of global macro at Fidelity Investments. “Gold remains an essential component of a diversified portfolio in a regime in which bonds might remain impaired,” he added

Gold has been a big winner for the past few years, keeping up and even beating equities. It's quite a performance for an asset that often gets lamented for not providing a cash flow. Since 2020, gold has produced almost the same return as the S&P 500 while having a lower… pic.twitter.com/khS02bvDbJ
— Jurrien Timmer (@TimmerFidelity) February 20, 2025

Timmer also noted gold’s traditional inverse correlation with real yields has broken down recently. He said that likely due to “fiscal dominance” and geopolitical factors like central bank gold purchases.

Gold is now testing the $3,000 level as the global money supply is perking up again and real yields are coming down.
Valuing gold has been a challenge these past few years, breaking their age old pattern of mimicking the inverse of real yields. The chart below shows a steady… pic.twitter.com/MWYi5TV6Wa
— Jurrien Timmer (@TimmerFidelity) February 20, 2025

Why It Matters: Meanwhile, during the ongoing four-day 2025 Conservative Political Action Conference, Tesla Inc. TSLA CEO Elon Musk addressed the gold at Fort Knox and said, “It’s the public’s gold. It’s your gold. I think you have a right to see it.”

President Donald Trump added during his speech, “We’re going to open the doors and inspect Fort Knox,” He continued, “I don’t want to open it and find the cupboards are empty,”

According to Treasury Secretary Scott Bessent, an audit is conducted annually and confirms that all the gold is accounted for and present, reported AP.

Since 1937, Fort Knox has secured U.S. gold. It now also functions as the Army’s human resources command and the site of its largest yearly training.

Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell on Thursday. SPY was 0.42% lower at $610.38, and QQQ was also down 0.42% to $537.23, according to Benzinga Pro data.

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