BlackRock’s Koesterich Advises Keeping Modest Gold Allocation Despite Declines

Gold fails to hold above $4,100 an ounce, pointing to near-term downside risks, yet BlackRock Portfolio Manager Russ Koesterich continues to recommend investors keep a modest allocation to the metal. Prices have fallen 25% from the January high and are down 7% year-to-date, as the early rally reduced gold’s safe-haven status.

Koesterich identified renewed U.S. dollar strength as the main driver, with the DXY up more than 6% and real 10-year yields rising from 1.65% to 2.20%. He stated, “Rather than providing downside protection, gold added risk to a portfolio.” The metal is also overlooked because it lacks AI-related earnings growth.

Nevertheless, structural reasons such as high debt levels, debasement risks and geopolitical tensions remain valid. Koesterich argues these factors still support maintaining a small gold position. Spot gold last traded at $4,074.70, up 1.45% for the week.