Shares of AngloGold Ashanti (AU 4.43%) rallied 5.6% on Thursday as of 1:33 p.m. ET.
Gold prices have been on an absolute tear in 2025, as have gold miners like AngloGold. Miners should be thought of as leveraged plays on gold prices, given that costs are largely fixed or stable, while rising gold prices and revenue fall entirely to the bottom line. Of course, falling gold prices have the opposite effect.
That's why AngloGold is up 244% even as gold prices are only up 65.3% for 2025, and why the stock was up 5.6% as the price of gold rose another 2.5% today.
Gold surges as a security blanket against geopolitics
Gold is often seen as a safe-haven asset in the face of inflation and global instability, and appears to have taken off this year as investors and other foreign central banks purchase gold instead of U.S. assets.
U.S. assets had been seen as relatively safe investments, but this year's tariff war, geopolitical instability, the prospect of stagflation, and the current government shutdown all appear to have dented confidence in U.S. dollar-denominated bonds.
Interestingly, the 10-year Treasury bond yield was down today, dropping below 4% for the first time since April. The price of Bitcoin was down markedly as well, down 2.76% as of the same time as gold was up almost that much.
If inflationary pressures or fears over the government's debt were rising, one might expect the 10-year Treasury yield to go up. And Bitcoin has been thought of as a digital version of gold and a store of value, so it's odd that Bitcoin is falling as gold is rising. The decline of Treasury yields and Bitcoin could be due to fears over the economy, as some regional banks reported some bad loans in their earnings releases today, fueling fears of an economic downturn.
One might think gold prices would decline if the economic data were weakening, as a recession is dis-inflationary. Thus, it appears geopolitics is the factor making the price of gold rise again today.
Today, Treasury Secretary Scott Bessent called the behavior of China's lead trade negotiator Li Chenggang "unhinged," continuing the escalation of tensions between the U.S. and China that began last week.
Increasing tensions between the U.S. and China and the now-three-week government shutdown seem to be spurring investors to gravitate to gold as a security blanket, while Bitcoin has returned to a status of trading like a volatile tech stock.
Image source: Getty Images.
Gold is the gold standard of portfolio insurance
While many had thought Bitcoin would serve as a kind of digital gold and a hedge against geopolitical instability, as U.S.-China tensions have risen this year, investors appear to be flocking more toward the original safe-haven of gold instead of Bitcoin.
Thus, for those looking to hedge geopolitical Black Swans, it still appears gold is the preferred security blanket as part of a diversified portfolio.
