Agio Gold Sector Fund Fact Sheet - March 2026

War, Rising Prices, and a Healthy Pullback

The price of gold took a breather in March. After a powerful run from January to February, during which the fund gained 23.33% year-to-date and gold surpassed $5,000 per ounce for the first time, prices pulled back last week to $4,503/oz. The Fund's year-to-date gain now stands at 3%, and the trailing twelve-month return remains at a strong 33.43%. This is not a reversal. It is a normal, healthy pause after a meteoric run.

The Big Picture

Conflict in the Middle East pushed oil prices higher, reigniting fears of a "stagflation" environment, where the economy slows while prices keep rising. When that happens, some investors sold gold to cover losses in other parts of their portfolios, adding short-term pressure. Meanwhile, hopes that the US Federal Reserve would cut interest rates quickly faded further, as higher energy costs keep inflation stubbornly elevated. Gold found solid footing near $4,075–$4,113, and our model signals a stabilisation at these levels.

Key Market Drivers

War Drives Up the Cost of Everything: Fighting in the Middle East sent oil prices higher. Higher oil costs ripple through the whole economy: groceries, transport, energy bills, etc. This raised fresh fears of stagflation: a painful combination of a slowing economy and rising prices. Historically, gold is one of the best assets to own in such an environment.

Forced Selling, Not a Change of Heart: When stock markets fall hard, large investors often sell their strongest assets, including gold, just to cover losses elsewhere. This is a mechanical, short-term hedging move. It says nothing about gold's underlying story, which remains intact, as a long-term preferred store of value.

Rate Cut Hopes Pushed Back: Because inflation looks stickier than expected, the Federal Reserve is unlikely to lower interest rates anytime soon. Some short-term traders rotate away from gold when rates look like they will stay higher for longer. That pressure is temporary, the longer inflation stays elevated, the stronger gold's case becomes.

The Stock-Bond Connection

The usual stock-bond inverse correlation is failing. In today's high-inflation, high-uncertainty environment, both assets are falling, making traditional "safe", traditional portfolios vulnerable. Gold is serving as an essential safety net, with major central banks remaining committed to it as a strategic reserve, strengthened by current geopolitics.

Looking Ahead

The next few weeks are critical; April economic and jobs data may confirm stagflation fears. When data shows a slowing economy with persistent inflation, gold has historically delivered strong returns. Our internal model triggered one of two BUY signals for gold equities. We await the second confirmation before deploying available cash. The long-term case for gold (global tension, sticky inflation, nervous central banks, vulnerable bond markets) remains strong. Our position is that the pullback is a buying opportunity.