At Any Rate
Global Commodities: Hypothetically, of course. Redirecting just 0.5% of foreign US asset holdings to gold could drive prices to $6,000
May 9, 2025
In this insightful conversation, Greg Shearer, Head of Base and Precious Metals Research at J.P. Morgan, shares his expertise on the evolving gold market. He discusses the growing interest in gold among international investors, especially amid concerns over U.S. asset stability. The episode delves into the hypothetical scenario where a mere 0.5% shift of foreign U.S. assets into gold could push prices up to $6,000. Shearer emphasizes the significant potential returns and the structural bullish outlook for gold amid changing market dynamics.
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Quick takeaways
- Foreign investors' shift toward gold, even by 0.5%, could significantly drive prices towards $6,000 by early 2029.
- Despite rising gold prices, supply growth remains limited, highlighting gold's value as a hedge against currency debasement.
Deep dives
Rising Gold Prices and Investor Interest
Gold prices have experienced significant growth, having doubled since November 2022, and experts anticipate they may reach over $4,000 per ounce in the coming year. This bullish perspective is anchored in the historical trend of foreign investments in U.S. financial assets, which have risen to nearly $57 trillion, representing a considerable portion of U.S. GDP. Despite some foreign investors expressing reservations regarding U.S. holdings and potential restrictions on fund expatriation, many still view the U.S. as a preferred destination for long-term capital. In this shifting landscape, gold is increasingly seen as an attractive alternative asset, particularly in light of ongoing geopolitical and economic uncertainties.
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