Gold is increasingly being viewed by institutional and private investors not just as a tactical addition, but as a structural core component in asset allocation. This is highlighted by a recent study from WisdomTree analysts. Authors Christopher Gannatti (Global Head of Research) and Nitesh Shah (Director of Research Europe) observe a ‘silent revolution’ in portfolios, closely linked to changing macroeconomic conditions.
According to this, the decades-long dominant 60/40 model – 60% equities, 40% bonds – is eroding as a standard for diversification and risk management. It is increasingly being replaced by a structure in which gold and other real assets play a fixed role in the ‘safe’ part of the portfolio.
Gold as Core Allocation Instead of Tactical Addition
For a long time, the classic 60/40 model was synonymous with balance: equities for growth, bonds as a stabilizer. This concept worked particularly well in an environment of low inflation, stable growth, and negative correlations between equity and bond returns. However, according to WisdomTree, this regime has fundamentally changed.
Since 2022 at the latest, many investors have questioned whether government bonds can still serve as a counterweight to equities to the same extent. In a world with structurally higher debt levels, active fiscal policy, and recurring inflation concerns, the focus is increasingly shifting to real assets – above all, gold.
In this context, the authors also cite assessments from other market participants: For example, Morgan Stanley recently described gold as an ‘attractive hedge against fiscal generosity and geopolitical risks,’ pointing to strong price performance and a very low correlation to equities.
WisdomTree emphasizes that gold is now allocated less out of ‘fear’ and more for functional reasons. In September, more than $10 billion flowed into gold ETFs worldwide – a signal that institutional and private investors are aligning their portfolios with an environment of structural deficits, higher government spending, and fiscal uncertainty.
Gold and the New 60/20/20 Architecture
From WisdomTree’s perspective, gold’s market behavior has noticeably changed. What was once considered a clearly interest-rate-dependent trade – falling yields supporting gold prices – is now increasingly understood as a hedge against fiscal risks.
The analysts point out that the correlation of gold to US government bond yields has changed: Instead of being clearly negative, it has recently been rather positive when rising long-term interest rates were interpreted as an expression of increased concerns about the sustainability of government budgets. In such phases, the gold price rose even as yields also increased – a break from previous patterns.
Against this backdrop, gold no longer appears in the analysis as an ‘accessory’ to a portfolio, but as an independent component within the block of real assets. Some strategists are already working with a structure in which approximately 20% of the previous bond allocation is reallocated to real assets – particularly gold.
WisdomTree describes this as a transition from the old 60/40 to the 60/20/20 mindset: 60% equities, 20% bonds, 20% real assets including gold. The goal is less about the opposition of asset classes (‘equities versus bonds’) and more about orthogonal diversification – meaning the combination of income sources that react as independently as possible from each other.
Gold holds a special position in this regard: It is a liquid asset that stands outside the liabilities of states and central banks and therefore carries no classic counterparty risk.
Europe Makes Gold a Counterpart to Government Bonds
According to the analysis, this development is particularly advanced in Europe. In a 2025 WisdomTree investor survey of 802 participants from Europe and the UK, gold was ranked as the preferred ‘safe haven’ by 41% of respondents – significantly ahead of alternatives such as Bitcoin or the US dollar.
Even more telling is the actual portfolio allocation: On average, surveyed investors hold around 5.7% of their assets in gold, according to the study – placing its share at the same level as the allocation to developed market government bonds. Gold is thus no longer perceived as a marginal position, but as an established component of institutional portfolios.
Access to the precious metal has also changed. Around 40% of survey participants prefer exchange-traded products (ETPs/ETFs), significantly more than physical bars or coins, derivatives, or mining stocks. Reasons include transparency, comparatively low costs, and easy integration into existing portfolio structures.
WisdomTree emphasizes that these regional shifts will not be limited to Europe. In a globalized capital market, changing allocations by European investors ultimately also influence the price formation and liquidity of gold worldwide.
Gold as an Integral Part of Modern Diversification
The central message of the analysis: Gold is increasingly understood as an integral part of a modern diversification strategy focused on structural risks. While the question used to be whether one should include gold in a portfolio at all, today the discussion is shifting more towards what the allocation can specifically look like and through which instruments it is implemented.
For the USA, the European development could serve as a blueprint. WisdomTree expects that the portfolio architecture on both sides of the Atlantic will gradually converge – with a growing role for hard, real assets.
Thus, the study paints a picture of a market in which gold is no longer seen merely as a crisis metal or tactical insurance, but as part of a structural approach to strengthening resilience – keyword ‘resilience’ of portfolios. How strongly and quickly this ‘silent revolution’ takes hold broadly will largely depend on the further development of inflation, national debt, and geopolitical tensions.
