September 12, 2025 • 17 mins
In this week's markets roundup, host Merryn Somerset Webb, editor-at-large for Bloomberg UK Wealth, sits down with Noor Al Ali from Bloomberg Markets Live to unpack gold’s remarkable rally and its implications for global markets.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Marin
Doalgs Money Market Rap, where we talk about the biggest
moves in markets this week and what's driving them, or
rather what we think might be driving them. I'm Maren Sumsep,
(00:24):
web Editor at Large for Bloomberg UK Wealth, and this
week joining me from the Bloomberg Markets Live team is
now Al Ali. Welcome, Nor Thank you so much for
joining us today.
Speaker 2 (00:33):
I really appreciate it. Thank you for having me.
Speaker 1 (00:35):
Okay, the thing I really wanted to talk about today
is gold.
Speaker 2 (00:38):
Anyone who listens.
Speaker 1 (00:39):
To the podcast will know that John and I are
not quite goldbugs, but very keen on gold and have
been suggested kind of for decades. Now that everyone has
a little in their portfolio of his insurance against absolutely everything. Anyway,
it finally looks like gold is having its moment, very
much in the spotlight. When you look at it. What
(01:00):
do you see? Why is gold suddenly the flavor of
the month.
Speaker 3 (01:04):
Well, look, it's a cocktail of politics, policy and positioning.
You have President Donald Trump's policies on tax cut and
trade wars that have really stoked deficit worries globally and also,
his attempts to pressure the FED have also shaken faith
in the concept of independence for the central bank, which
(01:27):
you know very much dictates sentiment broadly. So with markets
now pricing and rate cuts which typically weaken the dollar
and boost the gold's appeal against bonds. And then also
you have central banks globally, led by China aggressively buying
gold to diversify away from the dollar. Because if you're
expecting the FED to cut rates as aggressively as markets
(01:50):
see them now, you'd probably also expect the dollar to
fall in relation to that. So keep in mind as
well that do you just a couple of years ago
when Russia's reserves were frozen when it comes to affects holdings,
So that whole concept of diversifying a way into a
(02:11):
physical hard asset has been at the heart of central
bank policy in the past year. And then you also
have that retailer interest right ETFs have been pulling in
steady flows. Put it all together, gold is being treated
as both a safe haven asset and a structural reserve.
You know, the concept is like, why what's actually fueling
(02:31):
it right now? So gold has broken through both its
nominal record and it's the inflation adjusted peak from nineteen
eighty spot prices, I'm looking at them right now, up
about eighteen dollars, breaking through the three thousand, six hundred
and seventy four barrier, which is basically long seen as
like a watershed moment in real terms. So back in
(02:53):
nineteen eighty, and listen to this, the world was facing
a collapsing dollar, double digit inflation the around hostage crist
and gold spiked really fast, and then it kind of
was also very short lived. It took about two months
for it to kind of fizzle out. But this time
looks really different. So gold is up about forty percent
this year. The rally has been much steadier, spread across
(03:14):
two years, and there's a lot of structural demand, as
we've just said, so put together central banks, ETFs, investors
altogether treating gold as that hedge against policy and political uncertainty.
Speaker 1 (03:28):
And it's interesting, isn't it, Because for a long time
I'm done. I've been writing about there for a few
years now, watching the central banks gradually buy more and
more and more gold, and it's very under the radar
and press rising a little, and you can see the
volumes going into the central banks, but the retail investor,
of the ordinary investor, and as the institutional investors as well,
really didn't pick it up at all. And it's only
relatively recently that we've seen the drive from retail investors
(03:51):
to start getting into gold to hedge their portfolios. That's
that's a shift really at the last six six to
eight months, right.
Speaker 3 (03:57):
Yeah, absolutely, So. You know, historically, if you just take
a big step back with gold, ETF demand is a
really good sentiment barometer. So when I used to write
about gold about two three years ago, when I see
ETF demand rising, it kind of was a signal that
gold prices will probably rise as well. Right, But what
(04:17):
we've seen in relation to that that ETF demand hasn't
really shown up in its rally in the past two years.
I mean, sometimes it would pick up, sometimes it would fall.
ETF holdings weren't really that, you know, that trusted barometer
that I would typically look at and even its relationship
with fundamentals.
Speaker 2 (04:37):
Right.
Speaker 3 (04:37):
So the logic's very simple. So gold doesn't pay interest,
so when real yields are high, it looks expensive to hold.
But then when yields fall and the dollar weekends, gold
rallies and that's really worked for decades. But then gold
has also blown out through those fundamentals as well. Real
yields have stayed elevated this year because the FED has
held rates at a high, you know, at a high
(05:00):
for longer mantra. But you still have the precious metal
surge in past three thousand, six hundred.
Speaker 2 (05:06):
You know, the question is.
Speaker 3 (05:07):
Why, because it's not just about that fundamental relationship anymore.
It's also about what's happening or the concern for tomorrow. Right,
So markets have been betting for a while now that
the FAT will cut rates soon, so that means cheaper
borrowing a software dollar and lower yields. So the fundamentals
will ultimately catch up to gold. But what's interesting about
(05:29):
this cycle is that instead of gold catching up to them,
it's sort of doing its own thing.
Speaker 2 (05:34):
And so that's quite interesting. Well, that reflects, doesn't it.
Speaker 1 (05:38):
I'm going to reflects the point when the fear about
the future is so intense that the yales dynamic becomes
less relevant. So at the moment when people are thinking
about emerting in gold, obviously they're hedging against your politics,
et cetera. But what they're really doing is looking at
the massive levels of debt across the Western world, which
you've been on the front of the papers over and
over as the solver and bond markets have been moving
(05:59):
around the And so people look at that and they
can see that at this point, these huge debts relative
to GDP are something that call be fixed by cutting
a little spending here, cutting a little spending that. And
of course there's no appetite for that either. So the
rational person looks at that and they say, well, it
doesn't really matter what the inflation numbers look like right now.
We know we know that over the medium to long
(06:20):
term those debts have to be inflated away, and that
means that you have to hold gold. And that's a
dynamic that overtakes the normal times one of the relationship
between dollar and real interest rates. No.
Speaker 3 (06:37):
Absolutely, And I'll give you an example of some research
that I did earlier this this week. So if you
look at twenty eleven, that was a very good year.
I would want to say a good comparative year, because
obviously it's quite different, but a good.
Speaker 2 (06:51):
Year for gold.
Speaker 3 (06:52):
Right So gold said about fifty three record closes in
that single carendar year, and it was obviously during the
year of debt crisis, and there was also a US
credit downgrade that year if you recall, so that surge
in gold, if you want to look back now, we
would say is about sovereign risk, right, so doubts over
European stability, even the US's credit worthiness. But again it
(07:15):
proved fleeting one central bank stepped into calm markets. So
it's that's what's making this rally very interesting because it
makes it very different. So the look at what I've
done is in the research, I just looked at how
many record closers that gold has had throughout the year,
and now we're at what more than thirty But if
(07:35):
you combine that with twenty twenty four, this record run
in the past two calendar years, for including this one,
has superseded the eurodet crisis year, which is twenty eleven,
and it's also superseded the nineteen eighty one, which was,
as we've said, kind of like a blit but also
very similar conditions. And so it's showing that the rally
(07:58):
is much broader, dirty and there are structural forces that
are anchoring. So, as you've said, central banks have actually
been net buyers for three straight years purchasing Now purchases
topked about like a thousand tons annually, and China has
built up its reserve reserves in a stunning manner. And
the vaults in London hold over one trillion dollars in billion,
(08:22):
and even if we think about retailers, ETFs have drawn
in nearly four hundred tons in just for the first
half of this year. So you know, it's if you
look at all the drivers that a it's going on.
The question is is gold being treated as a alternative
for a reserve currency. We've talked about how the Euro
could be that, but obviously the ECB has had concerns
(08:43):
about that.
Speaker 2 (08:44):
We've talked about how other.
Speaker 3 (08:46):
Currencies like the yen, which is usually a haven asset,
but obviously you've got all that political trouble that's currently
happening in Japan and also the question of the Bank
of Japan and whether or not they'll raise rates again.
So obviously it just creates this vacuum where gold has
just become that much more appealing.
Speaker 1 (09:23):
So when do we look at gold and say, well,
that's enough, it's overpriced. Now, how do you ever value
something like gold? I mean, there's all sorts of attempts
to use different methods to say, well, this is the
correct price for gold et cetera. But that's very hard
to do. So when do we say, actually, maybe enough,
it's too expensive.
Speaker 3 (09:41):
Well, it depends what you compare it to, right, So
I guess it's a historical average. Obviously it looks quite
stretched compared to US stocks, for instance, it looks pretty cheap,
right So investors, Yeah, of course that's a whole different conversation,
isn't it. Investors are paying a premium for what they
see insurance, and how can you put a price on insurance? Right,
(10:03):
So they're willing to keep paying for it if it
protects them from what they would assume to be a
policy misstep, uncertainty, or a downturn. Right. So, we haven't
even talked about what would happen in a scenario where
a potential US procession will come in. That's why some
banks like Goldman Sachs think that like five thousand dollars
isn't even out of reach. The real test will come
(10:24):
when the feedt starts cutting rates, right, and markets are
betting that's going to happen as soon as this month.
In September. So if freight cuts do weaken the dollar
but also spark on a risk on rally in stocks,
so continuing to fuel that momentum we've seen in stocks
where there hasn't been really an alternative them, especially to
US stocks that have been fueled by AI and all
(10:46):
these other factors. The question here becomes, could gold lose
its momentum. It's been incredibly interesting because this has been
one of those rare years where you see both gold
and stocks actually hitting records repeatedly this year. And I'm
thinking looking at like the NAZAQ one hundred and the
(11:06):
SMP five hundred, So normally you would think one of
them would have to be doing the opposite, right, So
if gold is a haven asset, stocks are risk assets,
you would think, why would they move in the same direction. Well,
it's potentially. It's part of the story of diversification, right.
So if you want to hedge against trade tensions, deficits,
and fed uncertainty and then also write out the AI
(11:29):
fueled stock boom, you're gonna want both. But then the
performance gaps shows that there's a very strong bid for safety.
So gold has actually outpaced the SMP five hundred so
far this decade. And this has actually been some research
that our colleague John Authors has done this week, so
something few would have predicted just about two years ago. Right, So,
(11:49):
if you look globally, gold's rally has even left the
MSAI World Index.
Speaker 2 (11:55):
Excluding the US.
Speaker 3 (11:57):
Also far behind, so in that diverse has continued to
widen since the US election, So it's not really a
zero sum game, right, So we're were doubling down on
both equities for growth and gold for protection. And that's
why this rally feels very different from nineteen eighty or
even the euro crisis in twenty eleven. So when gold
(12:18):
at both times surged but stocks faltered.
Speaker 1 (12:22):
And feels very strange, doesn't it, saying think stock markets
and gold at recordized. It's not a dynamic we're used to.
Now a lot of people listening to this podcast will say, well,
everything you said about gold that holds good for bitcoin
as well. It does all the same things. Do you
feel like that about bitcoin? Do you feel that it's
not the same thing, because you know, you can't really
(12:42):
price either of them. But at least gold has history.
You know, it's got thousands of years worth of history
of protecting us against everything under the sun, and bitcoin
is interesting but new.
Speaker 3 (12:53):
I've covered bitcoin since it was sub one thousand, so
I'm one of those people that I've seen early adopters
and that kind of profile, and it's been quite very
interesting for me to see the change in profile of
the type of holders and the types of uses for cryptocurrencies.
Speaker 2 (13:12):
So whereas I used to know, I used to have.
Speaker 3 (13:14):
Contacts that would spend bitcoin or cryptocurrencies on pizza or
buying stuff online, now they wouldn't be cut dead selling
right because they maintained that hold or hotal mentality. So
you do have it's how you view cryptocurrency. We're back
to like one of those original questions about or you know,
(13:36):
debates about cryptocurrencies, And one of those questions that I
would always ask on panels is that like what do
you view it as?
Speaker 2 (13:42):
Is it a store of value? Is it a use
of for exchange?
Speaker 3 (13:46):
So do you use it the way you use the
US dollar or do you use it as a commodity
like gold? And so it's a big question I think
for bitcoin. Though it's rally this year has been for
a lot of reasons. A lot of it is tied
to obviously Trump's pro cryptopolicies. We've seen a lot of
(14:07):
progress on that this year as well, and we've also
seen its gains along with the risk rally as well.
So I would say, as far as I've been looking
at cryptocurrencies, the moves have really mimicked stocks more than
they have with gold, just because it's if you look
at the just the day to day diuration, So if
(14:28):
you just put two charts against each other, you'll see
that it's really followed that stock story a little bit more,
or that risk one story a little bit more, whereas
on days where gold was hitting your record or surging,
bitcoin hasn't really done the same. But that doesn't mean
that you don't have a wider user base of cryptocurrencies
(14:49):
that believes they are the hedge, they are the futures.
So and that's that's what makes bitcoin a lot more
interesting as well, because you have diverse users, you have
diverse concepts of why people want to buy and hold it,
and so it's quite different, I would say, And that's
what makes the conversation for me about gold and bitcoin
(15:10):
very different. But then you'll find, you know, one of
those early adopters listening to what I'm saying and thinking, well,
that's completely crazy, that's not right.
Speaker 2 (15:20):
That's bitcoin to the moon, right.
Speaker 1 (15:22):
So it's also you know, a long term hold. It
will say, well, if you're trying to head you get
as inflation that you wish you'd held bitcoin, So you know,
fair enough.
Speaker 2 (15:30):
Right, yeah, absolutely fair enough.
Speaker 3 (15:32):
I mean bitcoin, you can't really argue against what it
has done so far.
Speaker 2 (15:38):
Every time it hit a.
Speaker 3 (15:39):
Mark, and I remember people would talk about it hitting
one hundred thousand, ten thousand, when it was at two thousand,
when it was at three thousand, and people would laugh, right,
And you know, you have.
Speaker 2 (15:48):
Institutions guilty, and you'd.
Speaker 3 (15:51):
Have institutional investors who would never look twice at bitcoin.
But now you have a lot more institutional coverage, you
have a lot more institutional interest. Whether it has reached
the central bank holding level, it's something that we're not
able to tell just because of the nature of how
the blockchain network and cryptocurrencies operate. So unless these unless
(16:14):
these central banks report their holdings, it's very hard. But
you've had some countries in Latin America for instance, that
have been touting their holdings and how great they've been doing. Obviously,
some companies are a lot more exposed to cryptocurrencies, like Tesla,
for instance, but due to its own idiocentraatic stories this year,
it hasn't really performed as well as the other MA
(16:35):
seven companies.
Speaker 2 (16:36):
So really, bitcoin.
Speaker 3 (16:38):
Is very complicated, but in a good way, right, It's
what makes it interesting. It's what makes us want to
talk about it in every single conversation.
Speaker 1 (16:46):
Yeah, well, gold does at least have the benefits of
simplest to you, right, Yes, just is. No, Thank you
so much for joining us today.
Speaker 2 (16:53):
That was really interesting. Usually appreciated of course, Thanks for
having me.
Speaker 1 (17:00):
Thanks for listening to this week's maryn Talks Money debrief.
Speaker 4 (17:03):
If you like us show, rate, review, and subscribe wherever
you listen to podcasts. Also be sure to follow me
and John on ex or Twitter at MARINASW and John
Underscore Stepex and our guest Nor this week is at
nor l Ali n O O R A l A
l I, so do follow her as well.
Speaker 2 (17:20):
Super Interesting.
Speaker 1 (17:21):
This episode was produced by Samasadi, Production support and sound
designed by Moses and Questions and comments on this show
and all our shows are always welcome. Our show email
is Marror Money at Bloomberg dot net.
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Marin
Doalgs Money Market Rap, where we talk about the biggest
moves in markets this week and what's driving them, or
rather what we think might be driving them. I'm Maren Sumsep,
(00:24):
web Editor at Large for Bloomberg UK Wealth, and this
week joining me from the Bloomberg Markets Live team is
now Al Ali. Welcome, Nor Thank you so much for
joining us today.
Speaker 2 (00:33):
I really appreciate it. Thank you for having me.
Speaker 1 (00:35):
Okay, the thing I really wanted to talk about today
is gold.
Speaker 2 (00:38):
Anyone who listens.
Speaker 1 (00:39):
To the podcast will know that John and I are
not quite goldbugs, but very keen on gold and have
been suggested kind of for decades. Now that everyone has
a little in their portfolio of his insurance against absolutely everything. Anyway,
it finally looks like gold is having its moment, very
much in the spotlight. When you look at it. What
(01:00):
do you see? Why is gold suddenly the flavor of
the month.
Speaker 3 (01:04):
Well, look, it's a cocktail of politics, policy and positioning.
You have President Donald Trump's policies on tax cut and
trade wars that have really stoked deficit worries globally and also,
his attempts to pressure the FED have also shaken faith
in the concept of independence for the central bank, which
(01:27):
you know very much dictates sentiment broadly. So with markets
now pricing and rate cuts which typically weaken the dollar
and boost the gold's appeal against bonds. And then also
you have central banks globally, led by China aggressively buying
gold to diversify away from the dollar. Because if you're
expecting the FED to cut rates as aggressively as markets
(01:50):
see them now, you'd probably also expect the dollar to
fall in relation to that. So keep in mind as
well that do you just a couple of years ago
when Russia's reserves were frozen when it comes to affects holdings,
So that whole concept of diversifying a way into a
(02:11):
physical hard asset has been at the heart of central
bank policy in the past year. And then you also
have that retailer interest right ETFs have been pulling in
steady flows. Put it all together, gold is being treated
as both a safe haven asset and a structural reserve.
You know, the concept is like, why what's actually fueling
(02:31):
it right now? So gold has broken through both its
nominal record and it's the inflation adjusted peak from nineteen
eighty spot prices, I'm looking at them right now, up
about eighteen dollars, breaking through the three thousand, six hundred
and seventy four barrier, which is basically long seen as
like a watershed moment in real terms. So back in
(02:53):
nineteen eighty, and listen to this, the world was facing
a collapsing dollar, double digit inflation the around hostage crist
and gold spiked really fast, and then it kind of
was also very short lived. It took about two months
for it to kind of fizzle out. But this time
looks really different. So gold is up about forty percent
this year. The rally has been much steadier, spread across
(03:14):
two years, and there's a lot of structural demand, as
we've just said, so put together central banks, ETFs, investors
altogether treating gold as that hedge against policy and political uncertainty.
Speaker 1 (03:28):
And it's interesting, isn't it, Because for a long time
I'm done. I've been writing about there for a few
years now, watching the central banks gradually buy more and
more and more gold, and it's very under the radar
and press rising a little, and you can see the
volumes going into the central banks, but the retail investor,
of the ordinary investor, and as the institutional investors as well,
really didn't pick it up at all. And it's only
relatively recently that we've seen the drive from retail investors
(03:51):
to start getting into gold to hedge their portfolios. That's
that's a shift really at the last six six to
eight months, right.
Speaker 3 (03:57):
Yeah, absolutely, So. You know, historically, if you just take
a big step back with gold, ETF demand is a
really good sentiment barometer. So when I used to write
about gold about two three years ago, when I see
ETF demand rising, it kind of was a signal that
gold prices will probably rise as well. Right, But what
(04:17):
we've seen in relation to that that ETF demand hasn't
really shown up in its rally in the past two years.
I mean, sometimes it would pick up, sometimes it would fall.
ETF holdings weren't really that, you know, that trusted barometer
that I would typically look at and even its relationship
with fundamentals.
Speaker 2 (04:37):
Right.
Speaker 3 (04:37):
So the logic's very simple. So gold doesn't pay interest,
so when real yields are high, it looks expensive to hold.
But then when yields fall and the dollar weekends, gold
rallies and that's really worked for decades. But then gold
has also blown out through those fundamentals as well. Real
yields have stayed elevated this year because the FED has
held rates at a high, you know, at a high
(05:00):
for longer mantra. But you still have the precious metal
surge in past three thousand, six hundred.
Speaker 2 (05:06):
You know, the question is.
Speaker 3 (05:07):
Why, because it's not just about that fundamental relationship anymore.
It's also about what's happening or the concern for tomorrow. Right,
So markets have been betting for a while now that
the FAT will cut rates soon, so that means cheaper
borrowing a software dollar and lower yields. So the fundamentals
will ultimately catch up to gold. But what's interesting about
(05:29):
this cycle is that instead of gold catching up to them,
it's sort of doing its own thing.
Speaker 2 (05:34):
And so that's quite interesting. Well, that reflects, doesn't it.
Speaker 1 (05:38):
I'm going to reflects the point when the fear about
the future is so intense that the yales dynamic becomes
less relevant. So at the moment when people are thinking
about emerting in gold, obviously they're hedging against your politics,
et cetera. But what they're really doing is looking at
the massive levels of debt across the Western world, which
you've been on the front of the papers over and
over as the solver and bond markets have been moving
(05:59):
around the And so people look at that and they
can see that at this point, these huge debts relative
to GDP are something that call be fixed by cutting
a little spending here, cutting a little spending that. And
of course there's no appetite for that either. So the
rational person looks at that and they say, well, it
doesn't really matter what the inflation numbers look like right now.
We know we know that over the medium to long
(06:20):
term those debts have to be inflated away, and that
means that you have to hold gold. And that's a
dynamic that overtakes the normal times one of the relationship
between dollar and real interest rates. No.
Speaker 3 (06:37):
Absolutely, And I'll give you an example of some research
that I did earlier this this week. So if you
look at twenty eleven, that was a very good year.
I would want to say a good comparative year, because
obviously it's quite different, but a good.
Speaker 2 (06:51):
Year for gold.
Speaker 3 (06:52):
Right So gold said about fifty three record closes in
that single carendar year, and it was obviously during the
year of debt crisis, and there was also a US
credit downgrade that year if you recall, so that surge
in gold, if you want to look back now, we
would say is about sovereign risk, right, so doubts over
European stability, even the US's credit worthiness. But again it
(07:15):
proved fleeting one central bank stepped into calm markets. So
it's that's what's making this rally very interesting because it
makes it very different. So the look at what I've
done is in the research, I just looked at how
many record closers that gold has had throughout the year,
and now we're at what more than thirty But if
(07:35):
you combine that with twenty twenty four, this record run
in the past two calendar years, for including this one,
has superseded the eurodet crisis year, which is twenty eleven,
and it's also superseded the nineteen eighty one, which was,
as we've said, kind of like a blit but also
very similar conditions. And so it's showing that the rally
(07:58):
is much broader, dirty and there are structural forces that
are anchoring. So, as you've said, central banks have actually
been net buyers for three straight years purchasing Now purchases
topked about like a thousand tons annually, and China has
built up its reserve reserves in a stunning manner. And
the vaults in London hold over one trillion dollars in billion,
(08:22):
and even if we think about retailers, ETFs have drawn
in nearly four hundred tons in just for the first
half of this year. So you know, it's if you
look at all the drivers that a it's going on.
The question is is gold being treated as a alternative
for a reserve currency. We've talked about how the Euro
could be that, but obviously the ECB has had concerns
(08:43):
about that.
Speaker 2 (08:44):
We've talked about how other.
Speaker 3 (08:46):
Currencies like the yen, which is usually a haven asset,
but obviously you've got all that political trouble that's currently
happening in Japan and also the question of the Bank
of Japan and whether or not they'll raise rates again.
So obviously it just creates this vacuum where gold has
just become that much more appealing.
Speaker 1 (09:23):
So when do we look at gold and say, well,
that's enough, it's overpriced. Now, how do you ever value
something like gold? I mean, there's all sorts of attempts
to use different methods to say, well, this is the
correct price for gold et cetera. But that's very hard
to do. So when do we say, actually, maybe enough,
it's too expensive.
Speaker 3 (09:41):
Well, it depends what you compare it to, right, So
I guess it's a historical average. Obviously it looks quite
stretched compared to US stocks, for instance, it looks pretty cheap,
right So investors, Yeah, of course that's a whole different conversation,
isn't it. Investors are paying a premium for what they
see insurance, and how can you put a price on insurance? Right,
(10:03):
So they're willing to keep paying for it if it
protects them from what they would assume to be a
policy misstep, uncertainty, or a downturn. Right. So, we haven't
even talked about what would happen in a scenario where
a potential US procession will come in. That's why some
banks like Goldman Sachs think that like five thousand dollars
isn't even out of reach. The real test will come
(10:24):
when the feedt starts cutting rates, right, and markets are
betting that's going to happen as soon as this month.
In September. So if freight cuts do weaken the dollar
but also spark on a risk on rally in stocks,
so continuing to fuel that momentum we've seen in stocks
where there hasn't been really an alternative them, especially to
US stocks that have been fueled by AI and all
(10:46):
these other factors. The question here becomes, could gold lose
its momentum. It's been incredibly interesting because this has been
one of those rare years where you see both gold
and stocks actually hitting records repeatedly this year. And I'm
thinking looking at like the NAZAQ one hundred and the
(11:06):
SMP five hundred, So normally you would think one of
them would have to be doing the opposite, right, So
if gold is a haven asset, stocks are risk assets,
you would think, why would they move in the same direction. Well,
it's potentially. It's part of the story of diversification, right.
So if you want to hedge against trade tensions, deficits,
and fed uncertainty and then also write out the AI
(11:29):
fueled stock boom, you're gonna want both. But then the
performance gaps shows that there's a very strong bid for safety.
So gold has actually outpaced the SMP five hundred so
far this decade. And this has actually been some research
that our colleague John Authors has done this week, so
something few would have predicted just about two years ago. Right, So,
(11:49):
if you look globally, gold's rally has even left the
MSAI World Index.
Speaker 2 (11:55):
Excluding the US.
Speaker 3 (11:57):
Also far behind, so in that diverse has continued to
widen since the US election, So it's not really a
zero sum game, right, So we're were doubling down on
both equities for growth and gold for protection. And that's
why this rally feels very different from nineteen eighty or
even the euro crisis in twenty eleven. So when gold
(12:18):
at both times surged but stocks faltered.
Speaker 1 (12:22):
And feels very strange, doesn't it, saying think stock markets
and gold at recordized. It's not a dynamic we're used to.
Now a lot of people listening to this podcast will say, well,
everything you said about gold that holds good for bitcoin
as well. It does all the same things. Do you
feel like that about bitcoin? Do you feel that it's
not the same thing, because you know, you can't really
(12:42):
price either of them. But at least gold has history.
You know, it's got thousands of years worth of history
of protecting us against everything under the sun, and bitcoin
is interesting but new.
Speaker 3 (12:53):
I've covered bitcoin since it was sub one thousand, so
I'm one of those people that I've seen early adopters
and that kind of profile, and it's been quite very
interesting for me to see the change in profile of
the type of holders and the types of uses for cryptocurrencies.
Speaker 2 (13:12):
So whereas I used to know, I used to have.
Speaker 3 (13:14):
Contacts that would spend bitcoin or cryptocurrencies on pizza or
buying stuff online, now they wouldn't be cut dead selling
right because they maintained that hold or hotal mentality. So
you do have it's how you view cryptocurrency. We're back
to like one of those original questions about or you know,
(13:36):
debates about cryptocurrencies, And one of those questions that I
would always ask on panels is that like what do
you view it as?
Speaker 2 (13:42):
Is it a store of value? Is it a use
of for exchange?
Speaker 3 (13:46):
So do you use it the way you use the
US dollar or do you use it as a commodity
like gold? And so it's a big question I think
for bitcoin. Though it's rally this year has been for
a lot of reasons. A lot of it is tied
to obviously Trump's pro cryptopolicies. We've seen a lot of
(14:07):
progress on that this year as well, and we've also
seen its gains along with the risk rally as well.
So I would say, as far as I've been looking
at cryptocurrencies, the moves have really mimicked stocks more than
they have with gold, just because it's if you look
at the just the day to day diuration, So if
(14:28):
you just put two charts against each other, you'll see
that it's really followed that stock story a little bit more,
or that risk one story a little bit more, whereas
on days where gold was hitting your record or surging,
bitcoin hasn't really done the same. But that doesn't mean
that you don't have a wider user base of cryptocurrencies
(14:49):
that believes they are the hedge, they are the futures.
So and that's that's what makes bitcoin a lot more
interesting as well, because you have diverse users, you have
diverse concepts of why people want to buy and hold it,
and so it's quite different, I would say, And that's
what makes the conversation for me about gold and bitcoin
(15:10):
very different. But then you'll find, you know, one of
those early adopters listening to what I'm saying and thinking, well,
that's completely crazy, that's not right.
Speaker 2 (15:20):
That's bitcoin to the moon, right.
Speaker 1 (15:22):
So it's also you know, a long term hold. It
will say, well, if you're trying to head you get
as inflation that you wish you'd held bitcoin, So you know,
fair enough.
Speaker 2 (15:30):
Right, yeah, absolutely fair enough.
Speaker 3 (15:32):
I mean bitcoin, you can't really argue against what it
has done so far.
Speaker 2 (15:38):
Every time it hit a.
Speaker 3 (15:39):
Mark, and I remember people would talk about it hitting
one hundred thousand, ten thousand, when it was at two thousand,
when it was at three thousand, and people would laugh, right,
And you know, you have.
Speaker 2 (15:48):
Institutions guilty, and you'd.
Speaker 3 (15:51):
Have institutional investors who would never look twice at bitcoin.
But now you have a lot more institutional coverage, you
have a lot more institutional interest. Whether it has reached
the central bank holding level, it's something that we're not
able to tell just because of the nature of how
the blockchain network and cryptocurrencies operate. So unless these unless
(16:14):
these central banks report their holdings, it's very hard. But
you've had some countries in Latin America for instance, that
have been touting their holdings and how great they've been doing. Obviously,
some companies are a lot more exposed to cryptocurrencies, like Tesla,
for instance, but due to its own idiocentraatic stories this year,
it hasn't really performed as well as the other MA
(16:35):
seven companies.
Speaker 2 (16:36):
So really, bitcoin.
Speaker 3 (16:38):
Is very complicated, but in a good way, right, It's
what makes it interesting. It's what makes us want to
talk about it in every single conversation.
Speaker 1 (16:46):
Yeah, well, gold does at least have the benefits of
simplest to you, right, Yes, just is. No, Thank you
so much for joining us today.
Speaker 2 (16:53):
That was really interesting. Usually appreciated of course, Thanks for
having me.
Speaker 1 (17:00):
Thanks for listening to this week's maryn Talks Money debrief.
Speaker 4 (17:03):
If you like us show, rate, review, and subscribe wherever
you listen to podcasts. Also be sure to follow me
and John on ex or Twitter at MARINASW and John
Underscore Stepex and our guest Nor this week is at
nor l Ali n O O R A l A
l I, so do follow her as well.
Speaker 2 (17:20):
Super Interesting.
Speaker 1 (17:21):
This episode was produced by Samasadi, Production support and sound
designed by Moses and Questions and comments on this show
and all our shows are always welcome. Our show email
is Marror Money at Bloomberg dot net.
Host
Merryn Somerset Webb
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