Gold has long been touted as a hedge asset, a valuable investment that helps safeguard one’s interests in tough economic times. However, the recent US-Iran war has helped present a rather opposite stance, where the world witnessed a rapid gold selloff, a scenario that otherwise should have favored gold’s spike. Moreover, JP Morgan’s strategist has shared a compelling new analysis, categorizing gold as an investment asset rather than a hedge one. Is gold shedding its age of personality?

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Gold Is Not a Hedge Anymore?

According to Tai Hui, chief market strategist, Asia Pacific, at JP Morgan Asset Management, gold is not a compelling hedge asset anymore. Hui went ahead to label gold as a lucrative investment asset rather than a hedge, stating how it did not “work as a hedge against geopolitics.” Hui later shared how the yellow metal has not been consistent during the present war narratives, presenting it in a new light.

“We’ve been arguing for quite some time that gold is not a very good hedge against anything. If you look at its correlation with equities or risk assets, it’s not very consistent.” Hui later shared

Gold price has fluctuated throughout the US-Iran war dynamics, a scenario that should have favored gold prospects. Moreover, the rapid selloff during the war ended up hurting gold’s price by pushing it down nearly 24% off its peak. Hui emphasized the aforementioned development, adding how investors continue to treat gold as a hedge asset despite its price delivering a low revenue performance during such intense economic chapters globally.

“We’re not even talking about 70% of [geopolitical] events get an upside. It’s like 50/50. It’s a coin toss… Its volatility is as high as emerging market equities. “It does not generate income. Obviously, in the last two years, if you owned gold, you didn’t care about income, but the cost of carry is something to think about.” Hui added.

Gold As An Investment Tool

Gold is now being considered as a heavy-league investment asset, with high potential to spike in the future. Experts like Rashad Hajiyev have constantly been tracking the asset, commenting on how it’s meant to breach $7K and more.

“I think gold is going to recover to $5k fairly quickly, where the major battle is going to take place. Once gold overcomes this resistance, I believe gold is going to reach $7k or more within 3 months. To sum up, gold could be trading at $7k plus by July 2026…”

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