The case for gold as more than just a ‘safe haven’

Yasmine Raso

Senior Journalist

30 March 2026

Researchers from the World Gold Council have released new analysis presenting the case for gold as more than just a short-term ‘safe haven’ in Australian portfolios but as a strategic allocation that offers “a macro hedge” and acts as a portfolio diversifier at a time of uncertainty.

Authored by Marissa Salim, Senior Research Lead, APAC and Ray Jia, Research Head APAC ex India & Trade Engagement Deputy Head China, the report comes as the Reserve Bank of Australia (RBA) commences another tightening cycle and investors are grappling with inflationary pressures fuelled by energy shocks driven by the conflict in the Middle East.

The report found that gold has provided positive returns for investors across all RBA rate regimes since 2010, has increased in value in AUD terms since 2022, and offers “meaningful” downside protection during times of equity volatility.

“[Several] challenges have shifted the RBA from a cautious hold to active tightening. Australian CPI rebounded to 3.8% in January 2026, and the RBA raised the cash rate by 25 basis points to 3.85% in February – the first hike since November 2023,” the report said.

“The recent war in the Middle East sparked further inflationary concerns, prompting the RBA to hike rates again in March to 4.1% citing geopolitical risks and the resultant inflationary pressure as key reasons.

“Investors consider opportunity costs when allocating into any asset class, and with the RBA back in tightening mode, a natural question arises: do Australian rate cycles meaningfully impact gold returns? As it turns out, not much.

“Gold has historically delivered positive returns across tightening, hold and easing environments, with no clear evidence that rising rates impair gold performance, when priced in AUD. Moreover, gold delivered a higher average 12-month forward return than Australian equities in every RBA regime. The gap is most pronounced during easing cycles, when gold returned 14% – partially fuelled by potential AUD depreciation during such mode – and equities returned around 1% on average.

“This is mainly because gold is driven by supply and demand dynamics determined globally. For instance, global geopolitical risks, inflation and major central banks’ monetary policy paths collectively impact investment demand for gold from investors worldwide – including those from Australia. This underscores gold’s role as a global asset that is largely independent of Australia’s domestic monetary cycle.

“In fact, the past four years provides a meaningful stress test. RBA started tightening in 2022, making cash deposits attractive after ultra-low rates. Between 2022 and now, gold appreciated by approximately 181%, which more than offset the opportunity cost of holding a non-yielding asset. During this period, fixed income investors saw real returns fall around to 95 cents to the dollar with nominal returns rising by around 2%.”

The report also noted that stronger correlations between local bonds and equities have forced investors to seek “effective diversifiers” elsewhere.

“Since 2022, structurally higher global inflation and more frequent geopolitical shocks have driven bond–equity correlations higher, as discussed earlier. Yet gold has maintained a consistently negative relationship with Australian equities over time, offering investors a reliable source of diversification and portfolio resilience,” the report said.

“Indeed, gold has been put to the test during periods of systemic market stress and over the years has proven to be the asset class that performed better than others during such periods. And gold has also generally cushioned portfolio losses when geopolitical risks spike – with the most recent case in point being the US-Israel-Iran conflict where gold rose on the first trading day after the war.

“Gold’s performance is driven by a diverse set of global factors that operate largely independently of domestic interest rate policy. The question for Australian investors is no longer whether gold belongs in portfolios, but how can it not.”