al Reserve said it would begin cutting the federal funds rate— which influences interest rates across the economy— in 2024.
The rally stalled in last year’ s first quarter when inflation numbers remained stubbornly high and the Fed walked back its dovish pivot. Yields rose, the dollar strengthened and gold lost its luster. Gold benefits from a weak dollar because it’ s priced in dollars, and a weaker dollar makes gold less expensive to buy.
Ultimately, the Fed cut rates three times last year, and gold rose 26 %.“ That demonstrates that when yields and the dollar fall, gold tends to move in the opposite direction,” Bradshaw says.
And then came 2025. So far this year, an extraordinary confluence of factors have caused winds to blow in all sorts of directions. The Trump administration’ s tariff policy, among other things, has created geopolitical and economic turmoil, raised both inflation fears and recession
The Fed cut rates three times last year, and gold rose 26 %.“ That demonstrates that when yields and the dollar fall, gold tends to move in the opposite direction,” Bradshaw says.
fears, and generally fostered a high level of uncertainty.
Meanwhile, the Fed has so far( as of early May) kept its planned rate cuts on hold until it has better visibility on the economy. That all plays to gold’ s advantage as a hedge against volatility. The price of gold had risen 30 % this year so far, to more than $ 3,300 an ounce.
All of this means that Bradshaw these days isn’ t fretting about stagnant gold prices. If anything, he’ s never seen so many moving parts converging at once on this precious metal’ s market.
“ Today, there’ s lots going on with the macro,” he says.“ There’ s a lot of uncertainty, but it’ s still a lot of fun.”
The Big Two
While the Allspring Precious Metals Fund takes both a macro and micro view, Bradshaw and Makhorine are primarily bottom-up investors focused on individ- ual companies. Their portfolio contains 43 holdings, and its turnover rate was only 14 % as of this year’ s first quarter.
Although it’ s ostensibly a precious metals fund, most of its portfolio holdings are gold mining companies, with a smattering of other businesses focused on mine exploration and development. The fund also holds a position in gold bullion( at 4.6 %) within a Cayman Islands fund. Bradshaw says the Allspring fund owns the physical gold offshore because gold is taxed as a collectible in the U. S.
“ People ask me,‘ Why shouldn’ t I just own physical gold rather than investing in a fund?’ My answer is you should do both,” Bradshaw says, noting that gold is a portfolio diversifier because of its low correlation to stocks, bonds and other assets.
He cites studies showing that a 5 % to 7 % gold allocation can improve the riskadjusted returns of a traditional 60 / 40 portfolio of stocks and bonds.“ The riskier [ the portfolio ] is, the more gold you should own and vice versa,” he says.
And he posits that owning both physical gold and a gold-related fund diversifies an overall gold position within an investment portfolio.“ The gold price is less volatile than the equities, but in cases like this [ year ] the gold price goes up and the stocks go up even more.”
He notes that his fund was up 50 % this year as of early May, or 20 percentage points greater than the jump in the spot price of gold. On the flip side, when gold prices drop the equities tend to underperform. But even when that happens, at the very least some mining companies pay a dividend( which physical gold doesn’ t).
Beyond gold, the fund owns some silver mining companies, but this exposure makes up only about 4 % of the portfolio.“ We like gold much more than silver for a couple of reasons,” Bradshaw explains.“ One, gold is a monetary asset owned by central banks. And the gold market is much bigger than the silver market, so there are much more gold companies than silver companies out there.”
The precious metals complex contains from eight to 12 different metals( depending on the information source),
42 | FINANCIAL ADVISOR MAGAZINE | JUNE 2025 WWW. FA-MAG. COM