Gold, Bonds or Cash? EBC's Take on Where the Real Safety Lies in 2025

As global financial markets navigate a challenging 2025, the search for reliable safe-haven assets has become more pressing than ever. In an exclusive interview broadcast by China Central Television (CCTV), David Barrett, CEO of EBC Financial Group (UK) Ltd, offered clear guidance for investors confronting volatility and structural shifts. Alongside representatives from Goldman Sachs, Citigroup and JPMorgan, Barrett addressed the growing complexities of asset allocation, the evolving role of gold, and the underlying risks reshaping investor strategies.

Gold's Early Surge and Subsequent Retreat

In the first half of 2025, gold captured headlines with a striking rally of over 25% year to date, briefly surpassing $3,500 per ounce. This sharp rise stood in contrast to muted equity returns and falling oil prices, underscoring investors' appetite for defensive assets amid heightened uncertainty. Yet the precious metal's trajectory did not remain one directional. As CCTV reported, gold pulled back more than 5% in May, a response to easing trade tensions and a decline in the US Consumer Price Index (CPI) to 2.3% in April.

Barrett described this movement as emblematic of gold's dual nature. It is both a hedge and a signal. "Gold is not just a safe haven, it's a barometer for uncertainty," he noted, urging investors to read gold's fluctuations as part of a broader macroeconomic narrative.

Risk Management Before Returns

Amid ongoing market shifts, Barret's message was unambiguous: temper risk and stay flexible. "People should be conservative with their leverage and their exposure," he advised. "Keep your powder dry so you can react to these ever-changing news cycles. It gives you the opportunity to exploit moves when they come along."

Rather than overextending in pursuit of gains, Barrett promoted a cautious posture, one that privileges liquidity and the ability to respond swiftly. EBC is committing our efforts to this disciplined framework, helping clients balance resilience with readiness.

Bonds Under Pressure as Sovereign Worries Deepen

Beyond gold, another pillar of traditional safe haven strategy — sovereign debt — is now under scrutiny. Moody's recent downgrade of the US sovereign credit rating from Aaa to Aa1 on 17 May 2025 has ended America's run of top tier ratings. At the same time, both the US and Japan are seeing tepid demand at their 20-year bond auctions, sending yields to multi year highs and sparking concerns about long term fiscal stability.

Barrett pointed to this as a sign that risk aversion alone is not enough. "This isn't about risk aversion, it's about intelligent positioning," he stated. The re-evaluation of government bonds and fiat currencies calls for more nuanced allocation strategies.

Institutional Forecasts and the Road Ahead

Views on gold's future diverge across financial institutions. Goldman Sachs expects gold to reach $3,700 per ounce by the end of 2025. JPMorgan projects an even higher $4,000 per ounce by the second quarter of 2026. Citigroup, meanwhile, cautions that fading retail demand could lead to price softening beyond 2026.

Faced with these differing forecasts, Barrett offered a grounded view. The period of uninterrupted gold strength may be giving way to a more turbulent chapter. Still, with the right approach, opportunities remain. "We remain committed to helping our clients build resilient, forward-looking portfolios. That means understanding when to act, and when to step back," he concluded.

At EBC, we are committing our efforts to guiding clients through uncertainty, not by chasing trends, but by staying anchored in research, risk awareness and strategic discipline.

Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.