Joining me here at the New York Stock Exchange is Joe Cavatoni, senior market strategist and head of public policy for the US at the World Gold Council.
Joe, great to have you here.
Thank you so much for joining me.
It's great to be back.
Good to see you.
Well, when we hone in on gold within the precious metals market, we are looking at it shining brightly.
So tell us what you think is behind the gains and why these all-time record highs.
So 2025 and heading into 2026 have seen prices that we've never seen.
Just to put it into context.
In January we saw 12 out of 20 trading days hit record highs.
That was probably a little bit more accelerated than we were comfortable and often see, but what's behind it is pretty simple risk and uncertainties on the minds of every investor.
And questions around economic future of not only the US but just sovereign nations, their ability to sustain debt and support fiat currencies.
So you're seeing investors and you're seeing central banks, as you've mentioned, really taking a look at how do I diversify, how do I manage risk, and how do I hedge portfolios where I'm chasing return.
But needing certainty in my portfolio, and that's really been giving the eastern investor and the Western investor a lot of motivation to have gold in their portfolio.
Yes, so I do want you to break this down.
When it comes to central bank buying of gold, what is different now compared to previous years?
So where we have seen a significant difference now, we've been on a 16 year trend of net buying by.
Central banks, but the big difference has been the pace with which they've been choosing to pick up gold as a component of official reserves in their portfolio.
We've seen near record or record level flows of 1000 tons over the last 3 years.
2025, we saw a little bit of a slowdown in that, but that's been met with these higher prices, so the speed with which they're accumulating has slowed a bit.
The big difference here is that pace and the viable alternative they have to dollar and dollar-based assets.
So we're not saying that we're seeing this aggressive unwind of those assets.
They're just looking to complement them and again with risk in mind, not only internationally and globally for trade purposes, but also onshore when they look at their own concerns around inflation, supporting their own fiat currencies.
That's what's really different this time big moves, emerging market central banks making the move in the Gulf.
And Joe, I do want you to expand on the role of currencies here.
It's hard to believe that we're only in month two of 2026, given all that has happened so far on the fundamental and the macro front.
But given where the US currency is now, how do you see this affecting gold?
So people are looking at the dollar often as that harbor for safety, but also a gauge of economic development and strangle weakness of the US economy.
And they're looking at it as a signal, one of many signals that are moving the gold price, and I think they're looking at it in the context of saying, do I have the appropriate way to run my portfolio?
Is it set up in the right way?
Am I getting the yields I need?
Am I getting the returns I need?
And what am I going to see and how am I going to feel if things starting to weaken?
And I also think that this is a big discussion we're leading to around the value of fiat currencies.
Can the debt levels that are outstanding be sustained by these countries, not only the US, but other countries.
And is it viable, or are we going to see a weakening in those overall currencies simply because of that natural fiat currency devaluation and inflationary times?
And speaking of which, Joe, of course we're paying attention to what's happening around the globe, not just in terms of geopolitics, but when we're thinking about central bank buying as well as seasonality.
The Lunar New Year is here, and so I do want to get your take on what's happening in China and gold.
What's the relationship right now?
China, for us, we see that as one of the most significant markets for gold.
They're traditionally one of the largest markets for consumer gold in the form of jewelry, but increasingly so in the form of investment.
You know, we've seen more flows into Asian ETFs this year than we've seen into the Americas, which is a big surprise but exciting.
China's leading the pack.
They have a growing and sophisticated investment market, which includes insurance companies piloting gold in their portfolios.
But also retail investors and consumers buying gold not only in the traditional formats but in the format of financial instruments.
So it's a growing market.
But when the Lunar New Year comes around, we often see price support wane a little bit.
It's such a significant mover and an impact on the price.
You just have to be aware of it.
Not a problem, just something to be aware of.
Thank you so much for joining us as we kick off Q1.
Thanks for having me.
Thank you.
