Game Over for US Dollar. Hong Kong investors triple gold holdings per HSBC.
With Gold Allocations at Historic Lows (measly half percent) This Return to the 3% Mean Could Unleash a Sixfold Surge—Setting Off a Frenzied Stampede into Gold and Silver
Gold’s Global Allocation Near Historic Lows—But Signs of a Major Shift Emerge
By Jon Forrest Little
The world’s relationship with gold may be on the cusp of a dramatic transformation. For years, legendary investor Rick Rule has warned that global portfolio allocations to gold have plummeted to just 0.5%—a fraction of the multi-decade average of 2% to 3%12. If allocations merely revert to their historical mean, demand for gold could quadruple, or even increase sixfold, especially as central banks continue to set new records for gold accumulation.
Recent data suggest this reversion may already be underway, with affluent investors in Asia leading the charge.
Hong Kong Investors Triple Gold Allocations
A new HSBC survey reveals that wealthy investors in Hong Kong have nearly tripled their allocation to gold and other precious metals amid mounting economic and geopolitical uncertainties. Individuals with US$100,000 to US$2 million in investible assets now allocate 11% of their portfolios to gold, up from just 4% a year ago. On the Chinese mainland, the figure has jumped to 15%, more than double last year’s 7%.
This trend is not isolated. Globally, affluent investors have increased their gold holdings by 6 percentage points to 11% over the past year, mirroring the shift seen in Hong Kong. The HSBC survey, which polled over 10,000 investors across 12 markets—including the US, UK, mainland China, and Hong Kong—highlights a broad-based move toward gold as a safe-haven asset.
Gold Prices Soar Amid Geopolitical Tensions
Gold’s appeal has been further amplified by recent market turmoil. The precious metal was trading at US$3,356.61 per ounce on Thursday, up 28% year to date, and reached an all-time high of US$3,500 in April. The rally followed sweeping tariffs imposed by US President Donald Trump against major trading partners, which rattled global markets and sent investors scrambling for safe assets.
Central Banks Set the Pace
Central banks have also been major players in the gold rush. In May alone, they added 20 tonnes to their reserves, with the National Bank of Kazakhstan purchasing seven tonnes and the People’s Bank of China adding three tonnes. This is part of a broader trend: over the past three years, central banks have bought more than 1,000 tonnes of gold annually, a sharp increase from the 400–500 tonnes per year seen in the previous decade.
A recent World Gold Council survey found that 95% of central banks expect global official gold reserves to continue growing, and 43% plan to increase their own holdings in the next 12 months. The shift reflects a desire to diversify away from the US dollar and protect against economic uncertainty.
Investors Move Out of Cash, Into Alternatives
The HSBC survey also found that investors globally have reduced their allocation to cash and cash equivalents from 33% to 20% over the past year. In Hong Kong, the drop was even steeper, from 34% to 20%. Investors have also trimmed their positions in fixed income and bonds, while increasing exposure to cryptocurrencies, equities, and real estate.
47% of Hong Kong respondents own stocks
32% hold time deposits
Investors are showing a growing preference for mainland Chinese equities, followed by US and Asia-Pacific markets, for the coming year
Gold Miners and IPOs Ride the Wave
The surge in gold demand has also benefited gold miners. Several Chinese gold mining companies have raised funds in Hong Kong amid a boom in initial public offerings. Shares of Chifeng Jilong Gold Mining, China’s largest non-state-owned gold producer, have nearly doubled since their March debut5.
The Road Ahead
With global gold allocations still far below their historical average, even a partial reversion to the mean could unleash a powerful wave of demand. As Rick Rule notes, such a shift would have profound implications for gold prices and the broader financial system.
With central banks and private investors alike ramping up their gold holdings, the world may be witnessing the early stages of a new era for the yellow metal.
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