Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

4th Quarter | 2023

Quarterly recap



Current market environment performance of dynamic, risk-managed investment solutions.

By David Wismer

The performance of gold has been one of the more interesting asset-class stories of 2023.

Gold’s continuous futures contract is up 11% for the year and close to 13% for the past 12 months. Since October 2022, the gold contract has gained about 24%.


And, as noted in our Market Update for the week of December 4, gold reached an all-time high recently.

CNBC reported the following on December 3:

“Gold prices notched another record to kick off the week—with spot prices touching $2,100 an ounce as the global rush for bullion appears set to continue.

“Spot gold briefly traded above $2,100 an ounce on Sunday evening in New York, setting a new all-time high, before falling about 2% on Monday to roughly $2,028 per ounce. Gold futures hit an intraday record of $2,152.30 but settled down 2.27% at $2,042 per ounce.

 “Gold prices are on course to hit fresh highs next year and could remain above $2,000 levels, analysts said, citing geopolitical uncertainty, a likely weaker U.S. dollar and possible interest rate cuts.”

However, Bespoke Investment Group has a cautionary note for gold’s prospects, based on technical factors:

“Like the three other times it hit new highs in the last four years, as fast as it broke out, [gold] reversed lower just as fast. Gold also experienced a ‘golden cross’, but as we noted in a recent Chart of the Day, golden crosses in gold have been anything but bullish for the commodity going forward. If the recent weakness continues and the sector breaks below its 50 and 200-DMAs, a repeat of its performance after the last three all-time highs will look increasingly likely.”

That said, Costco members certainly seem to be enthusiastic bulls on gold. CNBC reported this past weekend, “Costco is once again selling gold bars to members. The one-ounce bars typically sell out within a few hours, according to Costco CFO Richard Galanti.”

Outlook for gold moving forward

Regarding the outlook for gold in 2024, the World Gold Council offers an interesting and even-handed perspective related to gold’s performance in the face of various recession prospects:

“As we look forward to 2024 investors will likely see one of three scenarios [see the following table]. Market consensus anticipates a ‘soft landing’ in the US, which should also positively affect the global economy. Historically, soft landing environments have not been particularly attractive for gold, resulting in flat to slightly negative returns. 

“That said, every cycle is different. This time around, heightened geopolitical tensions in a key election year for many major economies, combined with continued central bank buying could provide additional support for gold. 

“Further, the likelihood of the Fed steering the US economy to a safe landing with interest rates above five percent is by no means certain. And a global recession is still on the cards. This should encourage many investors to hold effective hedges, such as gold, in their portfolios.”


Gold’s long-term strategic role in portfolios

Having examined several forecasts for gold in 2024, the tendency for many analysts is to lean bullish. However, the presence of so many influential economic, geopolitical, interest-rate, and election-year factors underscores the uncertainty surrounding many asset classes next year, not just gold.

Two phrases in several of the outlooks I have reviewed are more important for financial advisers and their clients than a short- or intermediate-term outlook or trying to “chase” gold higher. These are “portfolio diversification” and “strategic allocation.”

Jerry Wagner, founder and president of Flexible Plan Investments (FPI), has remarked, “For investors looking for further portfolio diversification, gold is a unique diversifier—especially in trying times. Our comprehensive white paper shows that over the past 40-plus years gold has proven to be the best or second-best asset class to hold during eight different investing scenarios that concern investors. And holding gold in even a balanced portfolio has increased risk-adjusted returns over that period.”


The FPI white paper referred to is a comprehensive analysis of gold’s performance, looking at data over a lengthy period (1973–2021).

“The Role of Gold in Investment Portfolios”  (for investment professionals only) presents the history and ongoing discussion about the investment merits of gold, offering many compelling reasons why investors should consider adding the precious metal to their portfolios.

The paper does the following:

•  Examines the performance of gold relative to other asset classes under different market environments that typically concern investors.

•  Looks closely at how gold performs under different classic economic regimes.

•  Analyzes gold’s diversification characteristics versus other asset classes.

•  Reviews the risk-reward characteristics of portfolios with different allocations to gold.

The study concludes, in part,

“… Adding gold to a typical balanced portfolio has been beneficial across a wide range of allocations in terms of boosting risk-adjusted returns. … It appears most investors are likely underinvested in a full range of investment alternatives, and specifically in gold as a long-term asset class. …

“Investors concerned about capital preservation in times of macroeconomic risk and optimized returns in favorable times should strongly consider gold as a key portfolio element. Over the long term, gold offers the broad benefits of (a) ongoing marketplace demand in the face of limited supply; (b) historic protection from extreme market events, high periods of inflation, and devalued currencies; (c) a time-tested component of portfolio diversification; and (d) liquidity and versatility in terms of the many forms of ownership possible for an investor.”


While the news, macroeconomic data, monetary policy, and sentiment all influence gold’s short-term price swings, historical data regarding gold’s potential role in a well-diversified portfolio should be the focus. No matter how an investor chooses to take advantage of the investment benefits of gold, the key point is that an investment in gold should be strategic, not reactive.

If you are an investment professional, please take the opportunity to download FPI’s white paper “The Role of Gold in Investment Portfolios” here.

Also, importantly, please note that FPI is the subadviser for The Gold Bullion Strategy Fund (QGLDX), the first mutual fund that seeks to track the daily return of gold bullion. One of the fund’s important benefits is that, unlike other mutual funds that primarily track gold mining stocks, it is solely focused on the performance of gold bullion.

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