The Everything Rally: Gold and Tech Stocks Converging in a New Era of Diversification

The global investment landscape in 2025 is defined by a seismic shift: the accelerating de-dollarization of global reserves and the re-emergence of gold as a cornerstone of portfolio diversification. Amid this backdrop, technology stocks-once seen as a pure play on growth-are now being paired with gold in strategic allocations, reflecting a dual pursuit of innovation-driven returns and protection against systemic risks. This convergence marks a new era of diversification, where investors are rethinking traditional asset correlations and rebalancing portfolios to navigate a world increasingly skeptical of the U.S. dollar's dominance.

De-Dollarization: A Structural Shift in Global Finance

The U.S. dollar's share of global foreign exchange reserves has fallen to a two-decade low, driven by central banks' deliberate diversification away from dollar-denominated assets. According to a report by JPMorgan, the dollar now accounts for 58% of reserves, down from over 70% in the early 2000s, as nations like China, India, and Turkey prioritize gold and regional currencies to hedge against U.S. monetary policy volatility and geopolitical risks. This trend is not merely cyclical but structural, with central banks purchasing over 1,000 tonnes of gold annually since 2022-a record pace that underscores gold's role as a neutral store of value.

The dollar's depreciation has accelerated in 2025, with the U.S. Dollar Index declining by nearly 11% in the first half of the year. Analysts at Morgan Stanley predict further erosion, with the dollar potentially losing another 10% by the end of 2026, driven by rising U.S. debt and policy uncertainty. This depreciation has amplified demand for non-dollar assets, including gold, emerging market equities, and local currency bonds, as investors seek to preserve purchasing power in a world where the dollar's hegemony is no longer taken for granted.

Gold's Resurgence: From Safe Haven to Core Asset

Gold has emerged as the quintessential diversifier in this new paradigm. Central banks, particularly in emerging markets, have increased gold purchases to double its share in FX reserves since 2015. By Q1 2025, gold's weight in the Global Market Portfolio had risen to 4.5%, reflecting its growing institutional appeal. Prices have surged past $4,500 per ounce, fueled by both central bank demand and a surge in retail and institutional inflows into gold ETFs.

Gold's role has evolved beyond a crisis hedge. In 2025, it is increasingly viewed as a core asset, offering low correlation to equities and bonds while preserving purchasing power against inflation and currency devaluation. As stated by BlackRock in its Fall 2025 investment outlook, "Gold's structural strength and role as a store of value make it a critical component of diversified portfolios in a de-dollarizing world." This shift is evident in the performance of gold mining equities, which have outperformed the metal itself due to undervaluation relative to gold prices, offering investors a leveraged play on the bullion rally.

Tech Stocks: Growth Amid Volatility

While gold provides stability, technology stocks remain a vital engine of growth. The S&P 500 hit record highs in 2025, driven by AI-driven innovation and robust U.S. economic performance. However, the sector's concentration in U.S. indexes has raised concerns about overexposure to dollar-linked risks. As noted by Morningstar, "The rapid growth of tech stocks, particularly in AI, has created a concentrated risk that demands a more diversified approach."

Investors are now balancing tech exposure with non-dollar assets to mitigate volatility. For example, the MSCI EAFE index outperformed U.S. equities in 2025, partly due to the dollar's weakness and a shift in global capital flows. This trend highlights the importance of international tech exposure, particularly in markets like South Korea and China, where innovation cycles are decoupling from U.S. dominance.

The Convergence: Gold and Tech in Strategic Portfolios

The key to navigating this dual dynamic lies in strategic reallocation. Modern portfolio construction now emphasizes a 60/20/20 allocation model, shifting 20% of traditional bond allocations to alternatives like gold and cryptocurrencies. This approach leverages gold's defensive characteristics while maintaining equity exposure through tech stocks, which offer growth in a digital-first economy.

The low correlation between gold and tech equities is particularly compelling. While gold thrives during geopolitical tensions and inflationary shocks, tech stocks benefit from innovation-driven demand and favorable monetary policies. This duality is evident in the recent quarter, where both assets reached record highs simultaneously-a phenomenon dubbed the "Everything Rally" by analysts at Chronicle Journal. For instance, Newmont Corporation and Barrick Gold saw significant gains in 2025 as gold prices surged, while AI-driven tech firms in the U.S. and South Korea continued to attract capital.

Implications for Investors

For investors, the convergence of gold and tech stocks signals a need to rethink traditional diversification strategies. A 5–10% allocation to gold and gold-related equities can provide a buffer against dollar depreciation and geopolitical risks, while maintaining a core position in tech stocks ensures participation in innovation-driven growth. Emerging market bonds and local currency equities further enhance diversification by reducing exposure to U.S. fiscal risks.

However, caution is warranted. Gold mining equities, while offering leveraged exposure, remain vulnerable to operational risks such as ore grade declines and rising production costs. Similarly, tech stocks require careful selection to avoid overconcentration in high-growth, low-dividend sectors.

Conclusion

The de-dollarization of global reserves and the rise of gold as a core asset are reshaping the investment landscape. In this new era, the combination of gold and tech stocks offers a powerful dual strategy: gold as a hedge against systemic risks and tech stocks as a vehicle for growth in a digital economy. As central banks continue to diversify away from the dollar and investors seek resilience in uncertain times, the Everything Rally underscores the importance of adaptive, multi-asset portfolios.