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Investing.com -- BlackRock said historic rally in gold, despite its reputation as a haven, reflects stronger risk appetite across markets as investors respond to Federal Reserve rate cuts and easing labour conditions in the United States.
The world’s largest asset manager said gold’s surge even after a brief pullback from record highs near $4400 an ounce, has been driven by concerns about debt levels in major economies and heavy central bank buying.
But it added that speculative buying has also played a growing role as rate cuts boost liquidity and investor confidence.
“We see gold as a tactical exposure within portfolios.”
BlackRock said it expects the Fed to trim rates again this week, with a cooling labor market providing the space to do so. That backdrop,supports risk assets broadly, helping U.S. stocks climb to fresh record highs.
The firm refreshed its macro scenarios to account for different labor market outcomes, ranging from a rebound in hiring that could reignite inflation pressures to an AI-driven productivity boost that would extend equity gains.
Its base case assumes the current “no-hiring, no-firing” equilibrium continues, allowing for a soft landing and further rate cuts.
Gold’s sharp rise, it said, mirrors that broader optimism. Investors are seeking diversification from long-term bonds while remaining comfortable taking on more risk.
“These moves reflect how Fed rate cuts can support risk appetite,” BlackRock said, noting that a sudden correction in gold prices would not be surprising given the speculative buildup.