"All-Star" is a song by the American rock band Smash Mouth. Written by Greg Camp and produced by Eric Valentine, it was released on May 4, 1999, as the first single from Astro Lounge. In contrast to the more punk style of Smash Mouth's debut album, the song features a more radio-friendly style.
Source: Wikipedia
The song became ubiquitous in popular culture following multiple appearances in films, most notably in DreamWorks Animation's 2001 film Shrek. I've included a YouTube link to the opening scenes of the movie Shrek below, which features this song. It is definitely more family-friendly than the MTV music video from Smash Mouth.
All star by Smash Mouth (Shrek)
The chorus of the song is as follows:
Hey now, you're an all-star
Get your game on, go play
Hey now, you're a rock star
Get the show on, get paid
(And all that glitters is gold)
For anybody who has followed the price of gold over the last few years, and for those of you who have included exposure to the asset class in your portfolio during this time, you are likely aware. In nominal terms, gold has hit multiple all-time highs in 2025. And as you can see in our first chart below, it has also reached a new record price on an inflation-adjusted basis, finally surpassing the longstanding record set in 1980.
There are multiple reasons for the recent rise in gold prices. In the following paragraphs, I will explore a few of these. The first reason is that central banks around the globe have made a concerted effort to diversify their holdings by buying more physical gold. In 2024, central banks purchased 1,045 metric tons of gold globally, marking the third consecutive year they surpassed the 1,000-ton mark in gold purchases. This was the third-largest expansion of central bank gold reserves on record.
This gold buying frenzy continued into the first quarter of 2025 as central banks purchased an additional 244 metric tons of gold, according to the World Gold Council. This trend began after the 2008 Global Financial Crisis and has continued to accelerate more recently. Approximately 30% of global central banks say they plan to increase their gold holdings in the next 12 months, the highest amount ever recorded in this survey.
As you can see in our next chart from our friends at the Visual Capitalist, the United States clearly has the largest gold reserves of any foreign government or central bank. However, other countries such as Russia, China, Turkey, Poland, and India are aggressively buying in order to diversify their reserves and not have so many of their assets tied to the US dollar.
Source: Visualcapitalist.com
A second reason for the continued interest in gold is policy uncertainty. This has partially been spurred by President Trump's April 2nd “Liberation Day” trade/tariff announcements and subsequent 90-day pauses to negotiate with our trading partners, and even with China. However, this has also been compounded by uncertainty around the path of inflation, when and if the Federal Reserve Bank will be cutting interest rates soon, and the potential impact of the economy and economic policies on future corporate earnings.
The final reason I will explore today is that, as of July 1st, 2025, gold will officially be classified as a Tier 1, high-quality liquid asset under the new Basel III banking regulations. U.S. banks will be able to count physical gold at 100% of its market value toward their core capital reserves. Under the previous rules, it had been marked down by 50% as a Tier 3 asset. This is a significant change in how bank regulators perceive gold and could potentially continue to increase demand for the asset class.
While global central banks and large financial institutions have been buying steadily, most individual investors have not participated to any significant degree so far. As you will see in our final chart below, gold-backed ETF assets currently represent less than 2% of all ETF assets. This is down from approximately 8% in 2011, shortly after the Global Financial Crisis.
Looking at recent asset class performance, it is easy to see why investors feel that gold has a place in their portfolios. However, no asset class goes up in a straight line forever, and many of the factors that have caused gold's recent rise may not persist in the same way into the future.
The CFPs of Impel Wealth Management have always felt that diversification and including non-correlated assets as part of your overall investing strategy makes sense. That is why we have included gold mutual funds and ETFs in our model portfolios for many years. As there has been much chatter on cable news and social media about gold recently, as well as endless commercials on TV, we wanted to give you some background and perspective as we continue “Moving Life Forward.”
© 2025 Jesse Hurst
Senior Wealth Manager
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