As global markets continue to wrestle with mounting volatility and uncertainty, a fresh perspective is emerging regarding one of the oldest and most trusted commodities: gold. Traditionally regarded as a safe haven asset during times of crisis, gold has seen renewed interest, driven in part by a shift in investor sentiment and an increasingly complex geopolitical and economic environment. Kathy Kriskey, a renowned strategist, has offered insights into why gold is once again gaining traction among investors and the factors driving its price growth.

Gold has historically been a sensitive asset, closely linked to U.S. monetary policy, and particularly to interest rates. During periods of rising interest rates, gold, which does not generate yield, often faces headwinds as the opportunity cost of holding it increases. Additionally, higher interest rates typically lead to a stronger U.S. dollar, which further depresses gold prices. This traditional inverse relationship between gold and interest rates has been a staple of the precious metals market for years. However, as Kriskey points out, we are currently witnessing a shift in this pattern, with gold prices moving upward despite the prevailing economic conditions that would typically lead to a decline.

Kriskey attributes this unexpected resilience to gold to the growing uncertainty in the global economy. Geopolitical conflicts, combined with inflation concerns and the aftershocks of the pandemic, have led many investors to reassess the stability of traditional financial markets. The rising volatility, particularly in the tech sector, has left many questioning the sustainability of stock market valuations. Amidst this backdrop, a growing number of investors are flocking to gold as a protective measure. This surge in demand isn't just coming from the usual institutional buyers and central banks; an increasing number of retail investors are also entering the market, attracted by the relative stability gold offers.

This renewed focus on gold is further bolstered by actions taken by central banks around the world. As Kriskey emphasizes, many central banks are seeking to diversify their reserves away from the U.S. dollar, particularly as the dollar's strength becomes more uncertain in the face of geopolitical tensions and shifting trade dynamics. This trend has been a crucial factor in supporting gold prices. According to the World Gold Council, central banks purchased over 1,000 tons of gold in 2024, marking the third consecutive year of such large-scale purchases. This continuous accumulation has created a robust support level for gold, which is helping to stabilize prices even as other markets experience turbulence.

In fact, gold has performed remarkably well over the past year, outperforming many other traditional asset classes. As Kriskey notes, gold prices have surged more than 8% in 2025 alone, while U.S. stocks have managed only a modest increase of 2.8%. At the same time, the dollar has shown signs of weakness, further boosting the appeal of gold as an alternative store of value. This divergence between gold and the performance of other financial assets has prompted many to reconsider the role that gold can play in a diversified investment portfolio.

However, while gold is once again the focal point of many investors' strategies, Kriskey provides a nuanced view of its role in the broader economic landscape. Despite its reputation as a safe haven asset, gold is not without its challenges and limitations. Kriskey cautions against viewing gold as a foolproof hedge against inflation, noting that its price movements are influenced by a variety of factors that can sometimes lead to inconsistent correlations with inflation trends. She points out that while gold has historically rallied in response to periods of economic instability, its effectiveness as an inflation hedge can vary depending on the underlying causes of inflation and the broader market context.

For example, in the years 2021 and 2022, Kriskey notes that gold did not perform as expected in terms of protecting against inflation. During those years, inflation fears were high, yet gold's price movements were relatively muted. This divergence led Kriskey to take a more cautious stance on gold during that period. However, she now believes that the outlook for gold has improved significantly, especially in the context of the ongoing global economic uncertainty.

Kriskey's advice for investors is clear: while gold can be an important part of a portfolio, it should not be relied upon as the sole solution for hedging against inflation. Instead, she advocates for a diversified approach that includes not only gold, but also a broader basket of commodities. This diversified strategy should feature key sectors such as energy, metals, and agriculture, which collectively provide a more balanced approach to managing risk. By combining these commodities, investors can better navigate the uncertainties of global markets while taking advantage of the unique benefits each sector offers.

"I love gold; it leads the way and remains one of my favorite commodities," Kriskey says. "But I wasn't fond of gold in 2021 and 2022 because it wasn't an effective inflation hedge. I expect gold to be a frontrunner this year, but for inflation hedging, I would build a basket that encompasses three sectors: energy, metals, and agriculture." This holistic approach reflects Kriskey’s belief that no single asset can effectively hedge against all the risks posed by inflation and market volatility. Instead, a multi-faceted strategy is essential for optimizing returns and safeguarding wealth in the face of uncertainty.

Another crucial point Kriskey raises is the importance of timing and patience when investing in commodities like gold. She stresses the importance of avoiding the temptation to chase prices during periods of extreme volatility. While it can be tempting to buy into commodities when they reach historical highs, Kriskey warns against this approach. Instead, she advises investors to wait for price corrections and to exercise discipline when entering the market. By waiting for slight adjustments, investors can avoid overpaying for assets that may soon experience a downturn.

In this regard, Kriskey's strategy is grounded in the principles of long-term thinking and prudent risk management. Investors should aim to make informed decisions based on a thorough analysis of macroeconomic conditions and broader market trends. By keeping a cool head and avoiding knee-jerk reactions to market fluctuations, investors can better position themselves for long-term success. This mindset is particularly important in the current economic climate, where geopolitical tensions, inflationary pressures, and financial instability are creating an unpredictable environment.

Ultimately, navigating the gold market requires a balance between optimism and caution. While gold undoubtedly offers significant advantages in terms of hedging against geopolitical risk, currency depreciation, and financial market volatility, it is not a one-size-fits-all solution. As Kriskey advises, a diversified approach that includes a mix of commodities is the best way to manage risk while optimizing returns. By combining gold with other assets and maintaining a disciplined approach to investing, individuals can create a robust portfolio that is better equipped to weather the storms of economic uncertainty.

As gold continues to attract attention in the current economic climate, its role as a key component of a diversified investment portfolio will likely grow even more prominent. However, investors must remain vigilant and adaptable, understanding that while gold is a valuable asset, it is not immune to the complexities of the global market. By staying informed, exercising patience, and strategically balancing their portfolios, investors can position themselves to benefit from the opportunities gold—and other commodities—present, while mitigating the risks that come with market volatility.