Weekend Edition: The thirst for gold. How long before it loses its shine?
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Why did gold break the $4,000 barrier this week?
Gold hit another watershed moment this week, hitting four thousand dollars an ounce and going beyond that, and investors seemingly can't get enough of it. Is it uncertainty? Is it the rise of ETFs and retail investors? But also central banks are buying up more for reserves. Many it seems trust gold more than the US dollar. Is this the side effect of Trumpism or is it something more fundamental than that? And how long does it go before it loses its shine? That's this week. The morning call from NAB with Phil Dobby.
The weekend edition.
A year ago this week actually I spoke to John Reid, senior market strategist for the World Gold Council. I asked him back then why gold was reaching new highs, even though inflation was more contained. It wasn't obviously more just a c a hedge against inflation. Well back then gold was worth a little over two thousand five hundred an ounce. This week it got up beyond four thousand for the first time for Comics Gold, and we keep breaking records and it's up about fifty percent. percent year to date. So John is back with us again. John Reed from the World Gold Council. A year ago, would you have ever seen this meteorite rise that we're seeing today?
In short, no. Um I was positive towards the prospects for gold. But positive wouldn't have encompassed a near fifty percent rise in the So
what's changed? So is he a big part of all of this? Is it geopolitical uncertainty as a result of uh what's happening in the United States?
I think it's it's certainly driven by by the United States, not just President Trump, um, but also the slowing of the co of the economy over there as well, which is, you know, sets the the scene for a lot of further interest rate cuts over there potentially. Um so that's a mixture of economics And politics. I I actually don't think it's it's primarily geopolitics. I think it's mostly domestic politics.
How have gold’s drivers changed since the $2,500‑$2,600 level a year ago?
Which is then reflecting on the international scene. I don't think I don't think hot wars or the threat of hot wars are playing much of a role uh in the gold price at the moment. Obviously, we've seen um we've seen an ongoing conflict between uh Russia and Ukraine. Uh we've seen the what seems to be perennial troubles in the Middle East, but I don't think that they're playing an enormous role in in uh in in gold strikes. strength at the moment. Rather I think it is a combination of of US economics and US p politics, combined with I think some some more perhaps global themes of debt and uh deficits, which is not just uh uh
uh limited to the US Yeah, I mean that's it's uh that was gonna be my next question actually as to how much uh is debt, how much of it is too much currency, how much of it is that well, you know, we're very concerned about I mean certainly the gold bugs would be, you know, th those people who are pos possibly those buying up ETFs. Are they you know saying, Oh, there's just too you know, f there's just too much fiat currency, it just keeps on growing. Uh gold is a scarce resource, therefore gold Gold's gonna hold its value. We're just worried about uh about currency holding its value. Is that is that part and parcel? It's certainly in the retail market, is that part of it?
I think in the retail market that is part of it. It's also it's also been a common theme in conversations that I've had with um high net worth individuals, family officers, very rich people, basically, they tend to think much longer term um about uh generational wealth rather than their quarterly performance or their six monthly performance. And and and in the conversations that I've had around the world over the last um, I guess post-COVID, sort of certainly the last three years, uh, the stock of debt uh And governments inability to to rein in in deficits has been a common theme. Uh I don't think that's what's triggered um most of the move in the last twelve months. It's been it's been more of a slow burn that's been continuing for for a number of years.
So is it more a bit more speculation in short term then? We might have this slow build that you're talking about based on fundamentals.
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Chapters
7 chapters
1
Why did gold break the $4,000 barrier this week?
0:01–1:54
2
How have gold’s drivers changed since the $2,500‑$2,600 level a year ago?
1:54–5:45
3
Is U.S. economic uncertainty the main catalyst for the gold rally?
5:45–11:23
4
What role does speculation versus fundamentals play in today’s gold price surge?
11:23–18:27
5
Can gold realistically reach $6,000 by next September?
18:27–24:52
6
Why are central banks increasing their gold reserves and how does that affect price?
24:52–30:16
7
How do crypto assets compare to gold as a hedge against uncertainty?
30:16–30:31