Gold, Leverage, and Risk: 3 Moves EBC's David Barrett Recommends for 2025 Stability
In a year already shaped by volatility and shifting global sentiment, David Barrett, CEO of EBC Financial Group (UK) Ltd, is calling on investors to adopt a more measured, risk-aware approach to asset allocation. Speaking in a televised panel discussion on China Central Television (CCTV), Barrett joined senior figures from Goldman Sachs, JPMorgan, and Citigroup to unpack the forces driving market behaviour in 2025.
His core message? Stability begins with strategic discipline. Below, we unpack three key moves Barrett believes can help investors navigate the complex terrain ahead.
1. Treat Gold as a Barometer, Not Just a Safe Haven
Gold has taken centre stage in 2025, rising more than 25% year-to-date in early trading and briefly topping $3,500 per ounce. That performance has far outpaced US equities and sharply diverged from the oil market, which has seen a notable slump.
However, the climb was not uninterrupted. In May, gold pulled back by over 5%, largely in response to declining inflationary pressure. The US Consumer Price Index dropped to 2.3% in April, while trade tensions showed signs of cooling. As a result, demand for traditional hedges like gold softened.
Barrett sees these swings not as noise, but as signals. "Gold is not just a safe haven, it's a barometer for uncertainty," he said. He views the metal's role as both protective and diagnostic in a shifting macro landscape.
2. Reduce Leverage, Raise Liquidity
While market conditions may tempt some into high-risk plays, Barrett is urging caution. "People should be conservative with their leverage and their exposure," he advised. "Keep your powder dry so you can react to these ever-changing news cycles. It gives you the opportunity to exploit moves when they come along."
That mindset reflects EBC’s broader view: maintain enough flexibility to act decisively when conditions change. For 2025, that means less emphasis on chasing returns and more on readiness.
3. Prepare for Structural Risks in Sovereign Debt
Barrett also pointed to long-term risks that are flying under the radar. The recent downgrade of the US sovereign credit rating by Moody’s—from Aaa to Aa1 on 17 May—has stripped the US of its last top-tier status. Combined with weak demand in US and Japanese long-term bond auctions, this has sent yields to multi-year highs.
"This isn't about risk aversion, it's about intelligent positioning," he said. Sovereign debt, long considered a stable anchor in portfolios, is now facing scrutiny as fiscal sustainability becomes a growing concern. Barrett positions gold as a smart hedge against these deeper risks.
A Divided Outlook, but Clear Priorities
While institutional forecasts for gold vary—Goldman Sachs projects $3,700 per ounce by year-end, JPMorgan expects $4,000 by Q2 2026, and Citigroup warns of demand weakness post-2026—Barrett believes investors must chart a careful course.
"We remain committed to helping our clients build resilient, forward-looking portfolios. That means understanding when to act, and when to step back," he said.
As gold transitions from a one-way bull run to a more volatile phase, EBC is committing our efforts to guide clients through what lies ahead, balancing opportunity with caution.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Disclaimer:
Investment involves risk. The content of this report is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.
Publication date:
2025-06-18 04:03:08 (GMT)
