As a new global order takes shape and regime-change dynamics heighten geopolitical risks, gold remains a strategic allocation amid rising Middle East tensions, while disciplined risk management helps to contain drawdowns.
Key investment themes
- Dollar weakness persists: The Fed's easing cycle structurally undermines the dollar, reinforcing our constructive view on gold.
- Gold as a strategic allocation: In a regime of geopolitical instability and broken diversification, gold is a strategic conviction.
- Selectivity within AI: Technology has shown relative resilience in the current environment, but dispersion is widening. Stock selection is key.
- Risk management: In a world of higher volatility, option strategies and dispersion solutions keep investors invested while managing downside risk.
The reset of the geopolitical order
Since the rise of geopolitical concerns in 2022, a political regime-change dynamic has heightened geopolitical risks, which appeared contained until recently but have since been gathering force. The near closure of the Strait of Hormuz and the widening of hostilities across the Gulf have removed any residual ambiguity. This shift is durable, and it has become a live portfolio variable demanding active positioning.
Markets are assimilating this shift. Long-end rate volatility is rising, the dollar and gold have been advancing simultaneously, oil prices are pushing higher, and US equities, including technology stocks, are displaying resilience relative to Europe and Asia. Perhaps most tellingly, equities and fixed income declined in tandem last week, dismantling the diversification assumptions that have long anchored portfolio construction. At the same time, the favourable 2026 macroeconomic outlook is being questioned, and the uncertainty over the depth and duration of the latest geopolitical conflict remains substantial.
Going forward, two antagonistic forces will demand our close attention permanently. The rising instability accompanying the transition to a new global order carries an inflationary undertow, while the accelerating disruption driven by artificial intelligence (AI) is inherently deflationary. For now, AI’s disinflationary dynamics are being overshadowed by pressing inflation concerns, brutally repriced in a matter of days. Yet the interplay of these opposing forces has created an endemic market instability; one that calls for disciplined risk management.
Read our House View for more insights.
The financial instruments and investment strategies portrayed in this document are for informative purposes only. They may differ from those effectively held in an investor’ portfolio. Depending on the jurisdiction and investment profile, one or some of these instruments and strategies – including, where applicable, options – may not be permitted, available or suitable. The opinions expressed herein are correct as at 11 March 2026 and are subject to change without notice. Any forecast, projection or target, where provided, is indicative only and is not guaranteed in any way.
