Monthly Review - August 2025
"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation." ~ Alan Greenspan, Economist and former Chairman of the Federal Reserve
Gold bugs are smiling. It is up more than 25% year-to-date and hitting record highs in nearly every major currency. Once again, gold has reminded investors why it is the world’s oldest and most enduring form of money. Unlike fiat currencies, which bend under the weight of political expediency, gold remains constant, trusted, and scarce.
According to the World Gold Council’s Mid-Year Outlook 2025, the drivers are crystal clear: a U.S. dollar in secular decline, still-high geopolitical risk, and a structural bid from central banks diversifying away from US dollars. When the institutions that issue money are racing to own gold, investors should take note.
But there is more to this story than cyclical positioning. We have most-definitively entered what we define as the Fiscal Age: governments running chronic deficits as liabilities explode, weaponising fiscal policy, and relying on central banks to mop up the debt. This is not a temporary distortion. It is a structural shift! And in such a world, fiat money is destined to lose purchasing power.
The UK is perhaps the clearest case study. Inflation has proven stubbornly sticky, driven by energy insecurity, structural labour shortages, and populist fiscal promises. For savers and investors alike, this means a relentless erosion of wealth if portfolios remain tied only to sterling or gilts. Gold, in contrast, thrives in precisely these environments: it cannot be printed, inflated away, or devalued by political decree.
Nor is the U.S. immune. After a decade of “U.S. exceptionalism,” signs of peak America are emerging. Productivity gains from AI cannot mask fiscal indiscipline forever. The dollar’s aura as the unquestioned reserve currency is being questioned. As trade blocs diversify and global capital flows rebalance, prompts of its demise will increase. As the greenback weakens, gold shines brighter, not only as an inflation hedge but also as a currency hedge against U.S. decline.
The implication for investors is clear: gold is not just a tactical trade; it is a structural allocation. A 10% - 15% weight in portfolios provides a ballast against inflation shocks, fiscal excess, currency debasement, and geopolitical tail risks. In the Fiscal Age, where political cycles and debt dynamics drive markets, gold is the one asset that transcends regimes.
Gold isn’t just a safe haven. It is the lifeboat in stormy fiscal seas — the asset investors will be glad they owned when confidence in paper money falters.
To see graphs, download the PDF using the button at the top of this page.
Market Review
Deflationary Boom Assets
(Equities, Corporate Bonds, EMD)
Equities advanced broadly in August, with standout gains in Asia. Japan rose +6.9% (USD) and China surged +7.2% (USD) on policy support and optimism around growth stabilisation. Europe ex-UK gained +3.4% (USD) and the UK +3.6% (USD), while the U.S. added +2.0% (USD), led by value stocks (+4.6% USD) over-growth (+1.7% USD) as higher real yields weighed on tech. Global equities climbed +2.6% (USD), while emerging markets gained +2.7% (USD).
Credit markets contributed, with U.S. corporates (+1.0%) and EM hard currency debt (+1.3%) supported by stable spreads and firm risk appetite.
Deflationary Bust Assets
(Government Bonds)
Sovereign bond returns diverged. U.S. Treasuries gained +1.1% (USD), with TIPS up +1.5% (USD) as inflation expectations held firm. The Global Aggregate index advanced +1.5% (USD).
In contrast, UK Gilts fell -1.1% (GBP) and inflation-linked Gilts dropped -2.6% (GBP) on persistent inflation concerns. Eurozone bonds also softened, with sovereigns down -0.4% (EUR) and inflation-linked bonds off -0.9% (EUR). Sterling corporates slipped -0.5% (GBP), while Euro corporates were flat (+0.0%).
Inflationary Boom Assets
(Commodities & Managed Futures)
Commodities posted mixed returns. Industrial metals gained, led by copper (+2.7%). Energy lagged, with Brent crude falling -6.1% (USD) and the Bloomberg Energy Index down -3.0% (USD) as supply concerns eased and demand softened. Bitcoin retreated -7.5% (USD) after recent strength.
Managed futures strategies staged a recovery, with the SG CTA Index rising +1.4% (USD) and the SG Trend Index +2.9% (USD), reversing part of this year’s drawdowns as volatility created opportunities across rates and commodities.
Inflationary Bust Assets
(Precious Metals & Inflation-Linked Bonds)
Precious metals outperformed, with gold surging +4.8% (USD) and the Bloomberg Precious Metals Index up +6.4% (USD) on central bank demand and a weaker dollar. Gold’s +4.8% (USD) rally extended its YTD gain to over 30%, reaffirming its safe-haven appeal.
U.S. TIPS delivered positive returns (+1.5%), but UK and Euro inflation-linked bonds remained under pressure, reflecting higher real yields. This divergence highlighted the resilience of physical inflation hedges like gold versus the vulnerability of linker markets to monetary repricing.
To see graphs, download the PDF using the button at the top of this page.
CONTACT US
For further information on any of our services, or if you would like to arrange a meeting with an investment manager to see how we can work with you, please get in touch.
LeifBridge Investment Services
Shard Capital Partners
Floor 6, 51 Lime Street
London, EC3M 7DQ
United Kingdom
Telephone: +44(0)20 7186 9900
Email: Info@Leifbridge.com
www.leifbridge.com
Disclaimer:
We try to ensure that the information provided is correct, but we do not give any express or implied warranty as to its accuracy. We do not accept any liability for errors or omissions. The content of this brochure is for guidance purposes only and does not constitute financial or professional advice.
IMPORTANT INFORMATION
LeifBridge is a trading name of Shard Capital Partners LLP. Shard Capital Partners LLP is a limited liability partnership, registered in England with registration number OC360394. Shard Capital Partners LLP Registered office:36-38 Cornhill, London, EC3V 3NG.. Shard Capital Partners LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom, reference number 538762.
This document is provided for information purposes only and is intend for confidential and sole use by the recipient. It is not to be reproduced, copied or made available to others. The information set out in this document does not constitute investment advice or a personal recommendation. The views expressed in this document are not intended as an offer or a solicitation, to purchase or sell any security or other financial instrument, credit or lending product or to engage in any investment activity.
Past performance is not a guide to future performance. It is important that you understand that with investments, your capital is at risk. The value of investments, as well as the income derived from them, can go down as well as up and investors may get back less than the original amount invested. It is your responsibility to ensure that you make an informed decision about whether to invest with us, based on your particular objectives. If you are still unsure if investing is right for you, please seek independent advice.
The information and opinions expressed within this document are the views of (the company) and are based on information we believe to be reliable, but we do not represent that they are accurate or complete, and they should not be relied upon as such. Any information provided is given in good faith but is subject to change without notice.
No liability is accepted whatsoever by (the company) or its employees and associated companies for any direct or consequential loss arising from this document.
.png)