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New Gold Era: Financial Times Says It’s Beyond Price

Isaac Nuriani    |
Apr 19, 2024
  • Several “macro-trends” could keep inflation elevated for years.
  • State Street: No reason to think central bank gold purchases will end.
  • Dim U.S. fiscal outlook could help support gold long term.
  • Credible analysts project significantly higher gold in near- to intermediate-term.
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The economy is always generating interesting news stories, but it seems one of the most interesting of late has been the sharp rise in the price of gold since the end of February. 

Over the previous seven weeks, gold has climbed roughly 17% and now is hovering around the $2,400 per ounce mark.[1] 

But, for many analysts, what has been even more notable than the mere fact of gold’s current price strength is that gold has been flexing its muscles in what should be an adverse rate climate for precious metals. 

Yes, there’s been a fair bit of talk recently about interest rates finally coming down. They’ve been at 23-year highs since last July.[2] But the fact remains that interest rates have been at these highs and gold still has managed to rise nearly 20% in the last month and a half in spite of that reality.[3] 

Here’s where it may get even more interesting. 

Last week, the Labor Department had some rather unfortunate news for all those who’ve been waiting with bated breath for the Federal Reserve to start cutting rates. The nation’s most popular and recognizable inflation measure, the consumer price index (CPI), accelerated for the second month in a row coming in last month at 3.5% year over year.[4]  

And as it turns out, annual core CPI – which purposely excludes volatile food and energy prices for a clearer look at underlying price pressures – ran even hotter in March, landing at 3.8%.[5] 

Combined with an official unemployment rate below 4% for more than two years, each of those CPI measures is sufficiently far enough above the Federal Reserve’s 2% target that they were largely interpreted by analysts as rate-cut “killers.”[6] 

“The acceleration of inflation this year makes a cut prior to December challenging, in our view,” Bank of America analysts said in a note following last week’s inflation data.[7] 

Yet despite the strong anti-rate-cut messaging that emerged from the economy and its observers last week, gold – and silver, for that matter – managed to finish the week higher than where they started it. 

And as it turns out, gold’s inclination to thrive in the face of a hostile rate environment is not something brand new this cycle. 

In the effort to fight inflation, the Federal Reserve raised interest rates 11 times from March 2022 to July 2023 for a total of 525 basis points.[8] And yet even as the central bank was raising interest rates at the fastest pace in roughly 40 years, gold climbed 14% over 2022 and 2023, concluding that period having outperformed many of the most popular mainstream assets.[9] 

Are We Witnessing a Gold-Investing Paradigm Shift? 

Gold’s ongoing resilience in such an acutely unfavorable rate climate has prompted some analysts to consider the possibility that a significant change is underway in how gold is being viewed as an investable asset. Namely, that the global economic and geopolitical environment is evolving in such a complex and challenging way that the metal’s performance is becoming less a function of monetary policy and more a function of its perceived value as a hedge asset. 

And some go further, suggesting that an outright paradigm shift is underway as it pertains to the basis for investing in gold. 

The Financial Times seems to believe such is the case. A recent piece there declares that when it comes to gold’s abrupt move higher, “there are deeper, longer-term messages in this rise that investors should pay very close attention to.” 

In a nutshell, the messages are rooted in a broader, more singular transmission: there have been numerous structural changes throughout the DNA of the global economy in the relatively recent past. And the nature of these changes is such that much greater overall uncertainty now characterizes the worldwide economy, going forward. 

One of the natural consequences of that, in the eye of the Financial Times, is that an organically more fertile landscape for gold now exists. Not one in which that fertility is dependent upon an improved rate climate, but, rather, upon widespread changes in the structure of the global economy that include lasting inflation, a long-term assault on the dollar, persistent geopolitical tension and declining fiscal stability. 

And the consequences of that? According to the Times, gold’s time has come – and that it may be here to stay. 

Let’s see if we can learn any more. 

Multiple Structural Drivers Could Be Poised to Support Gold in the Years Ahead 

In the assessment of the Financial Times, inflation may well hang around a lot longer than most expect it to. And that reality, should it come to pass, could prove to be a significant driver of gold. 

“It’s hard to think of a macro-trend at that moment that isn’t inflationary,” notes the Times, explaining, “The economy is running hot — from fiscal stimulus in the US to more supply chain redundancy as countries de-risk, to all the capital investment required for the clean energy transition and re-industrialization in rich countries.”[10] 

“Even aging U.S. baby boomers are likely to be an inflationary force,” the Times adds, “since they have health, time and plenty of money to spend.”[11] 

Each of those factors has been cited by elsewhere by analysts as potential sources of structural inflation. For example, research by the Federal Reserve in 2022 found that the inflation that has bedeviled us all this cycle is attributable, in part, to the generous fiscal stimulus cued by the global health crisis.[12] 

And what makes that significant, going forward, is the degree to which such stimulus could be a feature of the broader economic landscape: Despite no specific crisis on the horizon that would justify exorbitant levels of deficit spending, annual budget deficits are anticipated to average roughly $2 trillion per year through at least the next 10 years.[13] 

Analysts also readily agree with the Times that the onshoring of supply chains – a symptom of the broader deglobalization trend – could contribute to structural inflation in the coming years. 

Fidelity International: Deglobalization Expected to “Prove Inflationary” 

“We expect this decline [of globalization] to prove inflationary in the medium term,” Fidelity analysts write, “as companies’ efforts to onshore their supply chains leave them facing generally higher costs.”[14]  

Fidelity also agrees with the Times in seeing the “graying” of not just the U.S., but the rest of the world, as a factor destined to exert an inflationary impact, as well. 

“The World Health Organization projects that between 2015 and 2050, the proportion of the world’s population over 60 will almost double from 12 percent to 22 percent,” Fidelity analysts note. “We believe that aging populations will raise demand for goods and services to levels that a shrinking working-age population will struggle to meet, piling upward pressure on prices.”[15] 

What makes structural inflation such a potentially gold-favorable influence is the possibility that higher interest rates – typically a gold headwind – can’t remain in place to fight persistent price pressures.[16] If the Federal Reserve does, in fact, cut nominal rates while inflation remains above target, analysts say that would likely push real yields down…and gold higher.[17] 

Aside from the possibility of “permanent” inflation, the Times sees numerous other factors serving as potential fuel sources for gold in the years ahead. 

One of those is the movement by many governments and central banks to lower their exposure to U.S. hegemony by lowering their exposure to the greenback; to de-dollarize, in other words. 

“Trade tensions between the West and China are growing,” notes the Times. “Meanwhile, the weaponization of the dollar following the outbreak of war in Ukraine has quickened moves in many countries, most importantly China, to sell Treasury bills and buy gold as a hedge against America’s financial might.”[18] 

We certainly know central banks have been on a gold-buying spree for years now. Not only have central banks been net purchasers of gold for the last decade and a half, but central bank gold demand has been at or near all-time highs in the last two calendar years.[19] 

And numerous strategists expect the trend to continue. “The reasons driving central bank gold purchases — to diversify their reserves, improve their balance sheets, and gain liquidity from an asset without credit risk — likely won’t change given today’s increasing economic and geopolitical risks,” State Street Global Advisors notes.[20] 

The Financial Times appears to be on the same wavelength as other analysts when it comes to the possibility we’ll see other structural drivers of gold, as well, including America’s uncertain long-term fiscal trajectory. 

Financial Times: U.S. Fiscal Uncertainty Is “Bad for the World; Good for Gold” 

“The most recent congressional Budget Office projections put U.S. debt at 99 percent of GDP by the end of this year, and have it on track to reach 172 percent by 2054,” the Times reports. “If this happens, the result would be monetization, inflation, financial repression and a period of extreme chaos in monetary policy and markets. Bad for the world; good for gold.”[21] 

In fact, some respected strategists see the nation’s deteriorating fiscal condition energizing gold right now. In a stunning uptick in acceleration, the national debt has been rising at a pace of about $1 trillion every 100 or so days for the last 10 months.[22] And Michael Hartnett, chief investment strategist at Bank of America, expressed his belief at the beginning of March that this concerning trend is one reason for gold’s recent – and current – upswing. 

“Little wonder ‘debt debasement’ trades closing in on all-time highs, i.e. gold $2077/oz,” he said at the time. Since then, gold has climbed more than $300 per ounce higher.[23] 

And many analysts see it going higher from here, on the strength of not only U.S. fiscal uncertainty but also on an array of other catalysts, including those highlighted by the Financial Times. 

Late last week, Goldman Sachs announced late last week it was raising its year-end price projection for gold from $2,300 per ounce to $2,700 per ounce, which, if achieved, would represent a 13% increase over present levels.[24] 

Others are even more optimistic about the outlook for gold. Bank of America recently announced it’s looking for gold to reach $3,000 by 2025.[25] Similarly, analysts at Citi said they’re forecasting gold to top $3,000 in the next six to 18 months.[26]  

More significant than those projections is the basis for them: as the Financial Times suggests, the prospect that we could be in the midst of a profound, fundamental shift in economic and geopolitical dynamics, one that effectively reestablishes gold as a relevant monetary and portfolio asset.  

BNP Paribas Analysts: People Now Using Gold to “Hedge Against a New World” 

As robust an outlook for the price of gold as $3,000 is, there are respected analysts who see it reaching even greater heights. 

The same Financial Times piece I’ve been detailing here shares this intriguing gold-price forecast: Philippe Gijsels, chief strategist at global multinational bank BNP Paribas Fortis, and his colleague, BNP’s chief economist Koen De Leus, project gold at $4,000 per ounce in “the not so distant future.”[27]  

Pretty heady stuff. But what’s key about their expectation of gold’s price is the stated reason for it.  

“This isn’t just an interest rate thing,” Gijsels said. “People are hedging against a new world.”[28] 

It’s a keen assessment. To be sure, falling rates – even just talk that falling rates are on the way – can create additional upward momentum for metals. But examine the more foundational economic and geopolitical dynamics in play currently, and you may conclude – just as the Financial Times has – that many of metals’ current drivers are profoundly secular and transcendent of central bank rate policy. 

As I’ve said before about price targets, the actual projections are not, in my opinion, anywhere near as relevant as the reasons cited as their bases. Specific price projections may or may not pan out. But if investors decide the logic underpinning those projections is sound, it may be enough for them to embrace what they believe is a beneficial course of action. 

Likewise, though it seems difficult to dispute the Financial Times gold-positive rationale, it remains to be seen whether that translates into higher gold prices. But investors who share that worldview may decide it makes sense to add gold, silver or both to their inventory of assets. Some may even choose to acquire the metals through a gold IRA.    

All of that aside, it is the logic, the rationale…that matters most. Investors who agree the economic and geopolitical landscape is transitioning in the way the Financial Times suggests may decide to hedge their holdings with metals. Alternatively, they may decide to adopt another strategy. Some might even choose to do nothing at all. But this much isn’t a matter of personal discretion: If the future suggested by the Times does come to pass, the implications could potentially be of concern…and all concerned may want to carefully monitor their approach and eventual impacts. 



[1] CNBC.com, “Gold COMEX (Jun′24)” (accessed 4/18/24). 
[2] FederalReserve.gov, “Open Market Operations” (accessed 4/18/24). 
[3] CNBC.com, “Gold COMEX (Jun′24).” 
[4] U.S. Inflation Calculator, “Historical Inflation Rates: 1914-2024” (accessed 4/18/24). 
[5] U.S. Inflation Calculator, “United States Core Inflation Rates (1957-2024) (accessed 4/18/24). 
[6] Bureau of Labor Statistics, “Labor Force Statistics from the Current Population Survey” (accessed 4/18/24). 
[7] Yuheng Zhan, Yahoo Finance, “The inflation fight has stalled and the first rate cut won’t happen until December, Bank of America says” (April 11, 2024, accessed 4/18/24). 
[8] FederalReserve.gov, “Open Market Operations.” 
[9] StockCharts.com (accessed 4/18/24). 
[10] Rana Foroohar, Financial Times, “Gold is back — and it has a message for us” (April 15, 2024, accessed 4/18/24). 
[11] Ibid. 
[12] FederalReserve.gov, “Fiscal policy and excess inflation during Covid-19: a cross-country view” (July 15, 2022, accessed 4/18/24). 
[13] CBO.gov, “The Budget and Economic Outlook: 2024 to 2034” (February 2024, accessed 4/18/24). 
[14] Timothy Foster and Libby McNie, Fidelity International, “Chart Room: Three structural factors making for stickier inflation” (April 27, 2022, accessed 4/18/24). 
[15] Ibid. 
[16] CNBC.com, “This week may be the week central banks stepped away from strict inflation targets: Mohamed El-Erian” (March 21, 2024, accessed 4/18/24). 
[17] J.P. Morgan, “Will gold prices hit another all-time high in 2024?” (January 17, 2024, accessed 4/18/24). 
[18] Foster and McNie, “Chart Room.” 
[19] Gold.org, “Gold Demand Trends Full Year 2023” (January 31, 2024, accessed 4/18/24). 
[20] Maxwell Gold, State Street Global Advisors, “What’s Driving Central Banks to Record Gold Purchases — and Will It Last?” (October 4, 2023, accessed 4/18/24). 
[21] Foroohar, “Gold is back.” 
[22] Michelle Fox, CNBC.com, “The U.S. national debt is rising by $1 trillion about every 100 days” (March 4, 2024, accessed 4/18/24). 
[23] Ibid. 
[24] Sam Boughedda, Investing.com “Gold prices 2024 outlook: Goldman Sachs raises its forecast” (April 12, 2024, accessed 4/18/24). 
[25] Business Insider, “Bank Of America Sees Gold At $3,000, Warns Of A Copper Supply Crisis: Metals ‘Dance To Their Own Tune’” (April 9, 2024, accessed 4/18/24). 
[26] Lee Ying Shan, CNBC.com, “Gold is shining ‘bright like a diamond’ and could hit $3,000, says Citi” (April 16, 2024, accessed 4/18/24). 
[27] Foroohar, “Gold is back.” 
[28] Ibid. 
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