Sam Dickie: Fisher Funds expert on the case for investing in gold in 2025

The price of gold continues to hit new highs, and speculators are wondering whether they should invest.

Gold has seen the strongest year since the 1970s, largely thanks to volatile markets and economic uncertainty. 

Fisher Funds expert Sam Dickie explained further.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Gold is having its strongest years since the nineteen seventies.
What a statement. A up sixty percent so far? This here? Now,
what's driven this incredible rise is the question, and of
course should you invest in it? Sam Dickey from Fisher
Funds is with us. Hello, Sam, you know what is
the investment case here for gold?

Speaker 3 (00:34):
It is on fire, up one hundred and fifteen per
cent of the pass eighteen months or so. So there's
three primary investment cases. The first and foremost one is
it's a safe haven head, so it's got a near
perfect hit rate of not only holding its value, but
often appreciating value in stop market correction, So the eighty
seven crash, the GFC crash, the European Financial crisis crash,

(00:57):
and various other corrections, gold would almost always go higher.
And that's because simplistically, it carries no credit risk, it
can't default, it holds its value and that becomes almost
self fulfilling. So investors pile into gold in times of uncertainty.
So that's the first one. The second one is it
is considered an inflation hedge, albeit it its track record

(01:18):
there is a bit more patchy, so the assumption goes
Unlike fiat currency, central banks can't print any more gold,
and while inflation erodes the purchasing power of fiat currency,
gold is a stable store of value and the third
one is a little bit more bearish. So central banks
and investors buy gold to diversify away from the US dollar.

(01:38):
And twenty twenty five has been one of the weakest
years for the US dollar in the past couple of decades.

Speaker 2 (01:44):
Now, how does the current period then compare to the
nineteen seventies.

Speaker 3 (01:49):
Yeah, it cast in the mind back but definitely similar
some similarity, so like now, investors had lost a bit
of confidence in the US dollar. Back then it was
because of persistently high inflation. They couldn't get a handle
on inflation, unsustainable US government spending, and then of course
throwing an oil shock there for good measure too. Today
inflation is a little bit stubbornly high, but not anything

(02:12):
like that was the problem back then. Today they've lost
a bit of confidence in the US dollar because of
high US government debt levels, which you and I have
spoken about before, and volatile policy decision making, so investors
are piling into gold is a more stable alternative. And
back then, if you think about the circuit breaker, it
was Paul Volka hiking interest rates to twenty percent to

(02:32):
break the back of inflation, which restored confidence in the
US dollar and pop the gold bubble. The circuit breaker
today could be a bit of austeria in the US,
some really sensible and prudent management of the government balance sheet.
But the problem is, and again you and I have
talked about this, no democratically elected government wants to be
the one to remove the punch bowl from the party.
They don't want to crack down on government spending.

Speaker 2 (02:55):
Yeah, so what does all of this mean for investors?

Speaker 3 (02:57):
Then? I think it can be a really helpful hedge
in a diversified portfolio, particularly as a safe haven hedge.
But this time it's had a really powerful run already.
And the tricky thing is it's really hard to value,
so it doesn't yield anything. It doesn't produce any income,
unlike a share or bond or property. And as Warren
Buffett said, the best gold gets dug out of the ground.

(03:17):
We melt it down, dig another hole, bury it again
and pay some stand around guarding it so it has
no utility in anyone watching from Mars would be scratching
their head.

Speaker 2 (03:26):
Yeah right, thank you very much, Sam appreciate it. Sam
Dickie Official funds. It's twenty one away from seven.

Speaker 1 (03:33):
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