Gold’s volatile run is far from over, with the precious metal increasingly reasserting itself as an alternative form of “risk-free” money alongside the US dollar amid persistent inflation and geopolitical uncertainty, according to Jupiter Asset Management.
With physical bullion in short supply, the firm sees mining companies as a more efficient way to gain exposure, offering potentially higher returns from smaller allocations thanks to strong profits and free cash flow.
The outlook follows a turbulent end to January, when gold suffered its steepest slide in four decades and silver recorded a record intraday plunge after both metals had surged to successive highs since the fourth quarter of last year.
The sell-off was triggered in part by the nomination of Kevin Warsh as US Federal Reserve chair, signalling a more hawkish policy outlook.
Ned Naylor-Leyland, Jupiter’s head of gold and silver, described the downturn as “a washout” rather than “a bloodbath”, arguing that the correction flushed out highly leveraged speculative positions and ultimately left the market in a healthier state for long-term investors.
Despite the volatility, he said gold remained in a structural tailwind and was likely to push to new highs while continuing to experience sharp swings along the way.
“What will happen, in my opinion, is that when gold takes out the previous high of US$5,600 an ounce, the whole cycle will begin again and more speculators will be drawn back in,” Leyland said in an interview.
London-headquartered Jupiter Asset Management oversees £50.4 billion (US$69 billion) in assets as of September 30, 2025.
Leverage has amplified price swings across precious metals, pushing volatility higher. The CBOE Gold Volatility Index surged during the late January sell-off to levels last seen in late 2008, while some mainland Chinese funds suspended trading and new subscriptions to manage premium risks.
Leyland said the current cycle differed from previous ones in that gold, rather than US Treasuries, was increasingly being viewed as the system’s primary risk-free asset – a shift he likened to conditions seen in the 1970s, when supply chains, geopolitics and raw materials played a more dominant role in shaping markets.
Silver, he added, would likely follow gold on the same roller coaster, remaining subject to similar bouts of volatility.
A renewed cycle of Fed rate hikes would be one of the few factors capable of sharply reversing gains in gold and silver, he said.
Against this backdrop, and given the shortage of physical bullion, Leyland said he favoured mining equities over bullion, citing their strong earnings and cash generation.
Holding a diversified basket of miners could also help mitigate company-specific operational risks, he added, noting that his fund primarily tracked global producers in overseas markets.
Persistent geopolitical tensions and rising industrial demand have kept gold, silver and other metals in favour among investors.
Reflecting that momentum, the MSCI Metals and Mining Index – which tracks 37 developed-market stocks – has gained more than 20 per cent since January, far outpacing the roughly 2 per cent rise in the MSCI World Index.
Among Chinese producers, Zijin Mining remains a top pick for foreign banks.
HSBC Global Investment Research expected the Hong Kong-listed shares to reach HK$58, while Bank of America Securities projected a HK$50 target, implying solid upside from current levels. The targets indicated a rise of at least 15 per cent from HK$43.52 as of February 16.
JPMorgan has also lifted its full-year forecasts, projecting gold could reach as high as US$6,300 an ounce and silver to average US$81 an ounce. By mid-February, the metals were trading around US$5,000 and US$77 an ounce respectively.
The US investment bank said in a February note that the recent correction could present a potential entry point for long-term investors.
Leyland struck a similarly bullish tone, comparing prospective investors to crocodiles waiting for the right moment to strike.
“My opinion is that once gold breaks above US$5,600 an ounce, you’ll see a different kind of investor behaviour,” he said. “People will feel compelled to participate.”
