March 31, 2026
Commentary
The Ninepoint Gold Bullion Fund returned +9.43% (Series F CAD) in Q1 2026.
NINEPOINT GOLD BULLION FUND - COMPOUNDED RETURNS¹ (%) AS OF MARCH 31, 2026 (SERIES F NPP226) | INCEPTION DATE: MARCH 18, 2009
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
15YR |
INCEPTION |
|
FUND |
-9.75% |
9.43% |
9.43% |
20.48% |
43.37% |
33.52% |
23.71% |
14.01% |
9.86% |
9.76% |
GOLD SPOT (CAD) |
-9.82% |
9.53% |
9.53% |
20.91% |
44.47% |
34.62% |
24.79% |
15.02% |
10.82% |
10.61% |
The first quarter of 2026 was a defining period for the gold market, characterized by historic price discovery followed by a necessary phase of consolidation. While the market experienced significant volatility, the underlying trend remains constructive as gold transitions from a period of speculative frenzy to a more stable, albeit higher, valuation regime.
Quarterly Performance: Strength Through Volatility
Gold opened the year with tremendous momentum, briefly surging to an all-time intraday high of $5,589/oz in late January. This rally was largely driven by a "perfect storm" of geopolitical uncertainty and shifting expectations for global monetary policy.
As the quarter progressed, the market entered a cooling phase. The nomination of Kevin Warsh as Fed Chair triggered a "Warsh Shock" across commodities. His reputation for "sound money" signalled a shift toward disciplined policy, sparking a massive gold liquidation as investors pivoted back to a resurgent U.S. dollar.
After the January peak, gold retraced to find firm support in the $4,100 – $4,400 range. Rather than signalling a breakdown, this correction has been viewed by many analysts as a healthy "reset," allowing the market to digest gains and establish a more sustainable baseline for the remainder of the year.
Core Drivers
1. Structural Central Bank Demand1
Global central banks remain the market’s primary "floor." While 2026 buying has normalized to an estimated 190–210 tonnes per quarter—down from the 1,000+ tonne peaks of 2024–2025—it remains double the pre-2022 average. This steady demand reflects a strategic pivot toward gold to hedge against fiscal deficits and shifting trade tariffs.
During the "Warsh Shock", central banks acted as a critical backstop, using the price dip as a strategic entry point:
- China (PBOC): Continues its dominant, multi-year diversification away from the U.S. dollar.
- BRICS+: Now holding roughly 6,000 tonnes collectively, with India emerging as a resilient buyer even above $4,000/oz.
- Saudi Arabia: Analysts view the Kingdom as a potential "wild card" that could match the entire year’s projected demand if it shifts just 5% of its reserves into gold.
With annual purchases projected at 750–850 tonnes, the commitment to gold as a core reserve asset remains firm despite a more hawkish Fed.
2. Persistent Macro Uncertainty
Despite a more hawkish tone from the Federal Reserve under new leadership, the macroeconomic environment remains supportive of gold:
- Inflation: While the Fed has taken a tougher stance to rein in prices, gold remains a preferred store of value due to lingering inflation. With February 2026 Core PCE steady at 2.97%, it’s clear that getting back to the 2% target is proving difficult, especially as energy costs stay high. This has led many to view gold as a reliable cushion in case the Fed faces a tough choice between cooling the economy too much or simply living with inflation that stays higher for longer.
- Geopolitical Complexity: Middle East instability has evolved from a series of temporary spikes into a permanent "risk premium" for gold. Events like "Operation Epic Fury" and disruptions in the Strait of Hormuz—which pushed Brent crude toward $120/barrel—have created a dual tailwind: gold acts as an immediate safe haven during conflict and a long-term hedge against the resulting energy-led inflation. Coupled with currency volatility from new tariff structures, gold remains the primary tool for investors navigating trade wars and a shifting global landscape.
3. ETF Inflows Continue at Record Pace2
Through the first two months of 2026, global gold-backed ETFs saw their strongest start to a year on record.
February alone recorded $5.3 billion in net inflows, marking the ninth consecutive month of increases. This pushed global assets under management (AUM) to a record $701 billion by the end of the month.
North American funds led the charge, contributing $4.7 billion in February. This suggests that U.S. pension funds and insurance companies—historically more focused on equities—are finally moving back into the sector to balance their "equity-heavy" portfolios.
Interestingly, in March, gold also demonstrated its role as a source of liquidity for professional desks. Following the January peak, March saw a record $12.8 billion outflow from commodity ETFs. However, this wasn't necessarily a "panic exit," but rather professional managers booking massive profits to cover losses in other sectors or to rotate into surging energy stocks.
Strategic Outlook: The Path Forward
The technical setup for gold remains positive. By closing the quarter with a successful test of the $4,400 level, gold has demonstrated that it has moved into a new price era. We expect the market to trade with a positive bias as we move into Q2, provided the geopolitical and fiscal drivers remain in place.
While the "easy gains" of the initial breakout might be behind us, the case for a core gold allocation remains compelling. Gold has proven its resilience in Q1, and we view the current price levels as a solid foundation for further appreciation as the year unfolds.
Sincerely,
Ninepoint Partners
1JP Morgan, UBS Research, World Gold Council
2World Gold Council
All figures in USD unless stated otherwise.