Fidelity Sees Gold’s Bull Run Far From Over as Stagflation Risks Loom

Tuesday, September 2nd 2025

Gold’s stellar performance in recent years is no reason for investors to step back, according to Ian Samson, multi-asset portfolio manager at Fidelity International, who argues that the current rally could be only the beginning of a prolonged bull market.

Gold’s Winning Streak

Samson highlighted in a recent research note that gold has delivered extraordinary returns, gaining 27% last year and climbing another 28% year-to-date through August 25. Despite these sharp advances, he emphasized that gold bull markets often last for years once they take hold.

“Gold remains unique in its ability to diversify portfolios even when bonds fail, protect against inflation, provide a safe-haven anchor, and benefit from longer-term structural shifts,” Samson wrote.

The Macro Backdrop: Stagflation Ahead?

Fidelity’s base-case scenario calls for a U.S. slowdown, or even stagflation, in the coming months. Samson noted that the Federal Reserve is likely to start cutting interest rates despite inflation still hovering near 3%, while tariffs and a tightening labor supply are expected to weigh on growth.

“This mix of falling rates, sticky inflation, and weak growth plays directly into gold’s strength,” Samson explained. A softer U.S. dollar—the metal’s main safe-haven competitor—would further reinforce the bullish setup.

Policy Uncertainty and Deficit Pressures

Samson also pointed to unprecedented uncertainty around tariff policies, warning that the ripple effects have yet to fully materialize. At the same time, the ballooning U.S. budget deficit is fueling concerns about monetary debasement, strengthening the long-term investment case for gold.

Structural Demand Remains Strong

Beyond macro risks, Samson underscored gold’s structural demand drivers. Central banks in countries like China, India, and Turkey continue to increase reserves to reduce reliance on the U.S. dollar. Global gold ETF holdings are climbing, and foreign reserve managers remain steady buyers.

With limited global supply, even a modest reallocation from the $57 trillion currently parked in U.S. assets into gold could have a meaningful impact on prices.

Fidelity’s Positioning

Fidelity International remains committed to gold within its multi-asset portfolios, Samson said. Exposure has been maintained through both passive gold-tracking instruments and gold miner equities. While profits were recently booked on the latter after a strong run, the firm continues to hold substantial exposure to the metal itself.