Pension funds use gold as bond hedge weakens

AI desk brief

The World Gold Council says gold is retaining a durable role in pension portfolios as investors hedge inflation, market shocks and the weakening diversification benefits of bonds. Case studies from the Netherlands, U.S., Britain and Australia show funds keeping gold allocations around 2%-5% via physical metal or futures, with positions originally built in 2020-21 still in place.

The key market takeaway is that the traditional bond hedge is less reliable: the WGC notes U.S. Treasuries have been positively correlated with equities since 2022, while gold has kept a more stable correlation profile and has more than doubled since early 2022 even as yields rose. That supports the investment case for gold as a portfolio diversifier and may underpin persistent institutional bid on dips.