The price of gold has risen to $3,000 an ounce, though one CEO has no interest in the asset
Gold breached the US$3,000 an ounce mark for the first time in history last Friday, reaching historic highs amid an escalating trade conflict between the US and Canada, China and the EU.
But Colin White has no plans of adding the asset to his portfolio anytime soon, as he remains highly skeptical of the value of gold.
“Gold has not proven to be reliable for pretty much any purpose in a portfolio,” said White, CEO and portfolio manager at Verecan Capital Management.
While the price of gold dipped slightly back to $2,990 an ounce by Monday, it looks to remain steady as investors look for insurance against potential inflationary reactions from US President Donald Trump’s wide-ranging tariffs. The price has gone up nearly 12 per cent since the beginning of 2025, while the S&P 500 has dropped seven per cent over the same timeframe.
However, White suggests that while gold has historically proven to protect against volatility, predicting when volatility will occur is near impossible, making the investment unattractive.
“It hasn't demonstrated empirically any kind of a forecast track record to make it a good long-term hold,” he said. “And if you're trying to use it as insurance for a portfolio, the events you want insurance from just are not forecastable.”
A simple alternative for a safe investment is the use of a daily interest savings account or a GIC account, according to White. But having a diversified portfolio is his best advice to mitigating the risks of a volatile market from a retail investment standpoint.
“Nothing ever replaces a well-diversified global equity portfolio,” he said. “That's going to give you the best opportunity to ride out whatever waves. You just build your boat so big that it doesn't matter what the waves are.”
White says those who accurately predict periods of uncertainty may get lucky on occasion, but the impact of one misstep could nullify years of investment.
“If I get it right 19 times in a row, and the 20th time I screw it up and lose all the money I made, I'm no further ahead and that's just the cold, hard truth,” he said. the key to retail investing is not blowing up … so you want to stay away from being really confident about something and betting on some future event.”
While gold is currently outperforming the S&P 500, White points out that the asset has never outperformed the stock markets over an extended period of time, making for an overall unsteady performance.
“It's like investing in something that only works maybe once every seven or 10 years,” he said. “From where we sit, holding onto an investment that only works once every seven or 10 years, we don't like that trade off,”
Investing in tangible assets such as real estate is a far more attractive prospect for White and Verecan, who likened gold to Bitcoin, making a distinction between investing and what he described as speculating.
“Investing is buying into a business that's generating economic activity that you want to participate in,” he said. “Buying something hoping somebody else wants is going to pay me more for it – that’s not investing, that's speculating.”
