2 factors driving gold’s record highs

00:00 Miles

Speaking of diversification, we’ll finish on this one. I’m curious what you and your team have made of the move in gold this year. That’s been at a record high. I think it’s at a record high right now as we’re talking. Just how the tenor of that conversation has changed as well because, you know, gold was just not cool for a very long time there and all of a sudden, uh, you know, we’re at records, we’re up about 50% so far this year and it really feels like, um, you know, gold bugs are are, you know, emboldened at this point, let’s say.

00:27 Speaker B

You know, that’s a great question, Miles. and it really is. It it’s, you know, we’ve owned gold uh in that ETF portfolio via one of the ETFs uh that gives you good exposure to it. Uh and uh it has really been as heavy as a gold brick to the small percentage that we had in performance over the years.

00:43 Speaker B

in it. Of course, over the last year, year and a half, it’s taken off. It’s a larger percentage we started with and we’ve held on to it. We believe that it really is what’s driven the price of gold. it’s really two factors uh in in terms of a quick uh glance at it. It would be uh of course individuals are buying it. It’s seen as a hedge against a weaker dollar,

01:00 Speaker B

a hedge against uh geopolitical risk. Uh, but also we see it really driven by central banks from around the world, particularly those in emerging markets and uh of those markets, Russia and China and India and the Saudi, I believe, also buying gold to hedge their currencies versus the dollar in the new uh trading world that they’re trying to create

01:21 Speaker B

uh, whether it’s the Silk Road from China or just a diversification away from dollar uh, dependence, uh, in global trade. Uh, those central banks and are buying gold and when they buy, they buy in size, much larger than a private investor by a ETF or even, you know, buying several slices of gold at their local big box store. Uh, we think that’s the key driver.

01:45 Speaker B

We also think that gold is probably getting close to its peak. We’re we’re more in the camp of of those that say after this run, uh, once things begin to stabilize somewhat, we get an idea where the dollar is going to settle, uh, while the Fed uh uh cuts rates, uh, we’d say gold still has an underpinning that remains and those central banks are likely to be buying gold for longer

02:05 Speaker B

because it’s a great way to hedge currencies that are traditionally weak against the powerful US dollar that is supported by a 30 trillion dollar economy, largest in the world, accountability, transparency and governance for all our faults and political arguments.