Resources/Weekly Insights

Volume 15, Edition 2 | January 19 - January 25, 2026

Gold: The Friend You Turn To

Doug Walters, CFA

Gold is in the spotlight again. Here’s why this famously unpredictable metal plays such an important role when markets get messy—and how disciplined investors can use its “zig” to their advantage.

Contributed by Doug Walters, David Lemire, Max Berkovich, Matthew Johnson

If you are lucky, you have that one friend or partner to call on when life takes a wrong turn. For investors, that friend is Gold.

We wrote about Gold in December, and its moment in the sun continues—not because the world suddenly rediscovered its ancient fascination with shiny metals, but because uncertainty continues to creep into the headlines. From geopolitical tensions to stubborn inflation readings, investors are dusting off their “just in case” playbooks. And in that playbook, Gold often gets the first call.

But here’s the interesting part: Gold’s usefulness doesn’t come from an expectation of huge returns, such as those we’ve seen recently. Instead, it comes from its ability to behave differently… and in particular… differently from stocks.

Most assets rise and fall together for good economic reasons—they are tied to growth, earnings, credit, or consumer demand. Gold isn’t. It has no cash flows, no management team, no business cycle. Those traits can be a negative when markets are calm… and delightful when they’re not. Gold lives in its own unique corner of the investment universe, spiking when the world feels at its most messy.

Gold may be that friend investors call on, but it’s a moody friend. It can soar at unexpected times and slog when logic says it shouldn’t. It’s not a steady performer, and it’s not supposed to be. Its value is in the zig and zag, and the opportunity those moves create in a diversified portfolio.

Taking advantage of Gold’s volatile personality requires opportunistic rebalancing—looking frequently for when the zig or zag has gone too far. With most of Gold’s moves being up lately, our opportunistic rebalancing has found multiple opportunities to take profits by trimming Gold back to our target allocation.

More than once we’ve been asked, “why are you selling Gold? It’s performing so well.” That is exactly why we are selling Gold! It’s not that we don’t like the asset class. Rather we are taking the opportunity to trim at all-time highs and buy something else low. This can lock in a gain while helping to keep portfolio risk in check.

Gold is just one piece of a well-diversified portfolio. It happens to be getting the headlines today, but long-term investing success is about leveraging diversification benefits of all asset classes across the decades.

2.8%

Core PCE Inflation

The Fed’s preferred measure of inflation, stayed at 2.8%. This is up from last month’s 2.7%, but below expectations of 2.9%.

Headline of the Week

Round Up the Usual Suspects: The Fed, inflation and employment

The first weeks of 2026 are offering a familiar mix of progress and ambiguity. Inflation continues to ease, but the broader takeaway is less about specific readings and more about what the trend implies. This month’s CPI and PCE reports suggest price pressures are still drifting lower, yet not in a way that gives the Fed a clean signal. Data quality issues caused by the government shutdown continue to reverberate. Fed policymakers seem poised to maintain their slow‑and‑steady posture rather than declare victory on inflation’s last mile.

On the employment side, the story feels similar. Job growth has cooled without tipping into outright weakness, and the unemployment rate has barely budged. But underneath the surface, hiring momentum is slowing, and several labor‑intensive sectors have lost steam. The picture is not one of deterioration so much as deceleration. It’s a job market that’s holding on, but with less confidence than even a few months ago.

These cross‑currents of softening inflation and labor demand continue to place the Fed squarely in the wait-and-see mode. For markets, it reinforces a dynamic we’ve seen for more than a year now: every piece of data nudges expectations but rarely settles the debate.

At some point, it would be refreshing to move beyond writing about inflation, employment, and the Fed. But for now, these remain the center of gravity for the economic narrative. and likely will until the signals become clearer.

The Week Ahead

The Federal Reserve rate decision and several Mag 7 earnings report should be the focus next week, but a highly anticipated announcement of the Federal Reserve (Fed) chair replacement may steal the show.

Decision, Decisions

The market is almost certain that after three straight meetings of cuts, the Fed will take a pause.

The last inflation report indicated inflation has moderated at a 2.8% annual rate and a forward looking Gross Domestic Product indicator, Atlanta Fed’s GDPNow, is modeling an impressive 5.4% expansion of the economy in the last quarter of 2025. Taking a pause on rate cuts looks like a done deal.
The focus will now shift to trying to assess the probability of any additional cuts this year and when.
Current predictions do not see a cut until the summer.
The President is expected to steal the show though and announce his nomination for the next chair, who will take over in May.
The list seems to have narrowed to four: White House economic advisor Kevin Hassett, Fed Governor Christopher Waller, former Fed Governor Kevin Warsh, and BlackRock’s Chief Investment Officer of Global Fixed Income Rick Rieder.

First Look

The Eurozone reports its fourth quarter Gross Domestic Product (GDP) on Friday.

This is the first estimate; there will be revisions, and it is expected to come in a bit lighter than the previous quarter at 0.3% expansion.
If the report is as expected, it would indicate that the Eurozone economy expanded by over 1% in 2025.

Mega

The four biggest names on the earnings calendar are Microsoft, Meta, Tesla, and Apple.

IBM, Visa, Mastercard, Caterpillar, Starbucks, UPS, Northrop Grumman, Lockheed Martin, Honeywell, Boeing, RTX, and UnitedHealth are huge companies worth watching as well.

About Strategic

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