Gold hits $4.1k, another record: What’s driving the highs?
00:00 Speaker A
Gold still shining, hitting fresh record highs and pushing above 4,100 an ounce. This comes as President Trump floats more potential tariffs and investors flock to safe havens. But our next guest says the rally, it’s more about fundamentals than fear. Joining me now, we got David Miller, CIO and senior portfolio manager at Catalyst Funds. Dave, great to see you as always.
00:20 Speaker A
So, first big picture, what’s let’s talk about what’s kind of just driving this run in gold. You say, you put it like this, David, you say, the move to all-time highs isn’t just about fear, it’s about fundamentals. Explain that for us, David. What do you mean?
00:36 David Miller
Well, so it’s certainly not just one thing. So, I guess to start, an easy play way to think about it would be those China tariffs you just mentioned. If you think about it, if you’re China, and you’re running the Chinese Central Bank and you own own 760 billion of US Treasuries and you just saw that the US was threatening 100% tariffs, and you saw that, you know, back in 22, the US seized 300 billion of Russia’s dollar denominated assets,
01:00 David Miller
you’d probably feel a lot safer if you held 760 billion of gold bars in a vault in Beijing that we couldn’t take at the flip of a computer switch. So that’s probably a starting point is you have these price agnostic buyers and it’s not limited to China. They’re not the only people we put tariffs on or, you know, indicated uh that we may not agree with their policy and don’t want us to have that leverage. So they’re an enormous buyer over 1,080 metric tons last year and they’ll likely do more than that this year, meaning uh the central banks particularly of the the BRICS nations.
01:29 Speaker A
Central Bank buying, is that it’s an interesting trend to watch. Is that in and of itself, David, enough to keep gold moving higher?
01:39 David Miller
Absolutely. The Central Bank buying is enormous because if you think about it, the US dollar as the world’s reserve currency fundamentally started to shift after that weaponization of Swift in 2022. And then it really just poured gasoline on that fire when you added the tariffs to it earlier this year.
01:53 Speaker A
What about US-China trade tensions? I mean, you saw that caused a freak out in the markets on Friday. What role do you what role do you think that’s playing here?
02:02 David Miller
I I think that’s pouring even more gasoline on the same fire. So, I mean, there’s already this concern. We already had these tariffs earlier. Uh we have we already had specific Chinese sanctions. So, any addition to that just uh makes people want to transition off the dollar faster and buy more gold as a uh reserve asset.
02:19 Speaker A
Let’s put some numbers on this. What what are your gold targets? What do you pencil in?
02:24 David Miller
So it’s obviously been moving pretty quickly. You know, we just got over 4,000 an ounce not too long ago and then starting crack 4,100. Uh I think middle of uh probably end of this year, you’re probably looking 4,500. You could even see 5,000 plus uh a year from now. A lot of it obviously depends on uh those fundamentals and how they shift uh over the the next few months and year.
