Asset management.

Just a few months ago, the outlook seemed relatively clear: the slowdown in inflation was expected to allow central banks to gradually support the economic cycle through rate cuts. That outlook has now faded into the past. In both the United States and Europe, the resilience of the economy and the return of inflationary pressures have led central banks to resume their monetary tightening policies. The Fed raised rates by 25 basis points in September, while the ECB had taken the same step a few days earlier. But beyond these decisions, it is above all the shift in the direction of monetary policy that, in our view, is of particular importance. Growth is not just holding steady. It is robust, particularly in the United States, and the rise of artificial intelligence is driving growth across many sectors. Furthermore, inflation remains a clear concern. Central banks must remain vigilant, and markets must learn to adapt without the ongoing support of accommodative monetary policy. Against this backdrop, we look ahead to the months to come.

Gold is experiencing a period of volatility following a remarkable rally. Rising long-term interest rates, more attractive bond yields, and profit-taking: these factors can trigger periods of consolidation, which are sometimes pronounced. Nevertheless, they are part of the natural dynamics of the markets following a sharp rise. However, the price of gold continues to be driven higher by government deficits and high debt levels, as well as by central banks’ desire to diversify their reserves. Furthermore, while interest rate trends remain a factor to watch, they alone are not sufficient to explain the dynamics at play. In a rapidly changing economic and geopolitical environment, volatility should not be interpreted as a trend reversal, but rather as an inherent characteristic of this asset class.

The “neither war, nor peace” scenario in the Middle East is fueling volatility, while tensions surrounding oil infrastructure and the Strait of Hormuz are exacerbating supply risks and global inflation. Faced with persistent inflation, central banks are maintaining a restrictive stance, leading to a broad-based rise in interest rates in the United States, the eurozone, and Japan. Despite rising interest rates and concerns surrounding certain issues related to artificial intelligence, equity markets have seen only a modest decline.

In Europe, the ECB raised interest rates by 25 basis points and is maintaining a hawkish stance, while growth forecasts have been revised upward, except for France. In the United States, rising energy prices are fueling inflationary pressures, while strong employment and economic activity have driven interest rates higher. Geopolitical tensions remain high, amid escalation in the Middle East and the rise of far-right parties in Europe, supporting oil prices and fueling short-term volatility.