00:00Now, central banks appear to be on a gold rush.
00:03They're now widely believed to be holding as much, if not more, gold than U.S. Treasuries.
00:08Well, let's talk now to Susanna Streeter, markets expert at the analytics company Consultable Insights.
00:13Good to see you, Susanna.
00:14So, is this a move by central banks towards gold or a move away from U.S. Treasuries?
00:21What's your take on it?
00:22Well, it's a bit of both, in fact.
00:24So, what you're seeing is central banks, particularly the People's Bank of China, going on this gold-buying spree because China, in particular, wants to nudge the world really away from reliance on the dollar, in particular.
00:40And we've seen, of course, the dollars fall this year, the dollar index down just under 10%, a really steep fall.
00:47And this, of course, has come amid all the trade ruptures that they've been with the new era of tariffs.
00:54But also, there is concern about the big debt mountains being run up, particularly in the United States.
01:03And, of course, with the U.S. government shutdown, it's come to an end.
01:06But it's really put the focus back on that debt pile.
01:11So, all of these factors are conspiring to push up the price of gold.
01:16We've seen it reach record levels, particularly last month.
01:20It's dipped back a little bit this month.
01:22But certainly, central banks are continuing this spree, China, for the 18th consecutive month, building up its gold reserves.
01:31Well, let's talk about the price of gold.
01:33It's been at a record high, of course.
01:35How much of this shift is because, actually, the gold holdings that are being held have appreciated in value, rather than necessarily more people are actually buying it?
01:43I mean, there has been central banks buying more gold.
01:48But also, individuals as well have been pushing up the price of gold.
01:53If you look and dip into retail sales figures, for example, here in the U.K., there has been evidence that actually gold jewelry sales have been pushed up.
02:02And that's been replicated in other countries as well.
02:05Simply, what you're seeing is that it's not just ordinary investors, but also institutional investors.
02:13They are really focusing on the reliability of gold, the fact that it's seen as a safe haven, rather than really wanting to secure in a yield.
02:24Because, of course, gold doesn't pay out interest, you know, like bonds, it doesn't pay out dividends, like stocks.
02:32But because of, it's not just the concerns over government debt being ratcheted up, but also there has been, of course, geopolitical uncertainty.
02:41And so gold is really being valued for its durability.
02:45So central banks obviously buying into this idea of the safe haven.
02:49Is there any particular area where central banks are buying into this more, emerging markets maybe?
02:57Certainly, what you're seeing is that China and Turkey, for example, they've been buying up a lot of gold.
03:04If you look at China's strategy as well, it wants to build up China, the authorities really want to try and make the world see China as a gold hub.
03:17So the Shanghai Gold Exchange set up a few years ago, really gaining traction and really wants to pull some of the business away from the comics, for example, in the United States, but also potentially London as well.
03:31And so it's also setting up kind of vaults right across the world, a kind of a gold trail, a gold route, as it were, to try and boost, bolster really the yuan, the renminbi, against the dollar.
03:46So all of this is part of a longer term strategy.
03:48So this is the first time in 30 years that there's been this crossover point.
03:53Do you think it's going to carry on growing wider?
03:55I think that, you know, in the past, you can't rely on gold, you know, keeping the value that it's seen.
04:04There have been a number of factors really conspiring to see it reach up to record levels.
04:10I think it's probably going to be bumping along where we see it right now.
04:15Could be a few dips along the way.
04:17I don't see it retracting significantly because this whole concept of U.S. exceptionalism has been dented, that the U.S. is somehow unique in attracting investors.
04:30And certainly there has been a real concern.
04:33We talk about valuations, for example, in the AI sphere of concern about that.
04:37And as these jitters continue, I do expect that gold will continue to be seen as a safe haven for investors who really want to diversify their holdings.
04:50Susanna, great to talk to you as always.
04:51Thanks for coming on the programme.
04:52That is Susanna Streeter from Consultable Insights.
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