KUALA LUMPUR (Jan 21): Gold prices could soar towards US$5,000 per ounce as elevated valuation of US assets and the weakening role of traditional safe havens bolster the precious metal's appeal as a portfolio diversifier, according to Amundi, Europe's largest asset manager.

Growing geopolitical and economic uncertainty has made the construction of resilient portfolios more critical than ever, said Aidan Yao, Amundi Investment Institute's senior investment strategist for Asia at Amundi’s Market Outlook 2026 briefing on Wednesday.

As investors question whether the US-based safe-haven assets will continue to provide their historical protection, gold is increasingly benefitting from the diversification away from these US assets.

“Over the past year, we have seen the US dollar actually weakened alongside a retreating equity market. If you look at the US Treasury's correlation with the US equity, in fact, the three-year rolling correlation already turned positive since 2022,” Yao said.

Historically, bonds and stocks moved in opposite directions, providing a hedge. With that relationship broken, gold has emerged as the primary alternative, according to Yao, adding Amundi has been positive on gold for more than two years. "We see it reaching US$5,000 per ounce over the next year,” Yao said.

Gold is currently trading at US$4,800 per ounce after rising 12.5% since the start of the year. The metal has more than doubled in value over the last two years, from the US$2,000 level.

Beyond gold, Amundi remains constructive on emerging markets, citing improving economic growth, robust earnings prospects and more attractive valuations compared to the US.

“There is an economic growth premium that is increasingly manifesting in EPS (earnings per share) growth of listed companies,” Yao told The Edge on the sidelines of the event.

Emerging markets’ monetary and fiscal policies also remain conducive, he said, adding they typically perform pretty well during US easing cycles.

“Valuations of emerging market assets are more reasonable, particularly compared to the US. Historically, emerging markets tend to benefit from a weak US dollar. We are expecting this weak dollar to continue over the medium term,” Yao added. 

Yao also stressed that the current strength seen in emerging markets is not a short-term fluke but a structural shift that could last three to six years.

“Over the last 12 years, the US outperformed emerging markets in 10 out of the 12 years. So it is a very long stretch of the US outperforming, and that is not natural.

“2025 is the first time in a long time that emerging markets outperformed the US, and this is not an aberration. We think that this is a turning point,” he noted.

A key part of the renewed interest in emerging markets is China, where investor sentiment has begun to improve as the heavy "geopolitical discount" applied to Chinese assets over the last several years begins to fade.

Global investors are starting to come back to the Chinese market, Yao said, as perceptions have started to shift, with China's economy proving more resilient than expected despite the ongoing trade tensions.

“This reflects investors scaling back the geopolitical discount previously applied to China, while reassessing the premium that had been assigned to US assets.

"Before 2025, a lot of investors thought the US was in a position of strength, and China was in a position of weakness. That led to a geopolitical discount being applied to Chinese assets and a premium being assigned to US assets,” he added.