‘Gold is not a very good hedge against anything’ and should be viewed as ‘an investment asset’ – JP Morgan’s Hui

J.P. Morgan AM’s Tai Hui argued gold should be viewed as an investment asset rather than a reliable hedge, saying its geopolitical hedging properties are inconsistent and that the recent Iran-war selloff showed it “did not work as a hedge against geopolitics.” He cited a drop from $5,415/oz to $4,100/oz over 20 days, a 24% peak-to-trough decline, as evidence that gold can be highly volatile even during conflict-driven stress. Hui said gold’s correlation with equities and risk assets is not stable, its volatility is comparable to emerging-market equities, and it does not generate income, making carry an important consideration. He acknowledged that central bank buying, reserve diversification away from the U.S. dollar, and broader concerns over debt, money supply and currency debasement still support the bull case for holding gold. The desk implication is that gold may continue to function more as a return-enhancing allocation than a short-term risk hedge, particularly if geopolitical risk remains elevated but fails to sustain safe-haven flows. JPM remains structurally constructive on the metal and views pullbacks as temporary, but the article reinforces a near-term risk that traders should not assume conflict headlines automatically translate into durable upside.