As in every issue of the In Gold We Trust report, we want to conclude this issue by looking ahead. In this outlook, we will draw on the most important lessons we have learned from our analysis of the gold market since 2007.
Gold is not a “pet rock.” When we began writing about gold in 2007, we were met with skepticism from the mainstream. Yet the performance figures speak for themselves: almost +600% in US dollar terms, corresponding to an annualized growth rate of 10.8%. Gold has outperformed virtually every traditional asset class during this period.
The Austrian School of Economics was right. Credit expansion leads to misallocation, inflation, and crises. The cycle is following the Austrian script with a precision that has surprised even us. Financial repression – the systematic expropriation of savers through negative real interest rates – has become a permanent fixture.
De-dollarization is no longer a niche topic. In 2007, the US dollar accounted for nearly two-thirds of global currency reserves. Today, that share stands at less than58%. If gold reserves are included, it is only around 45%.
Trust is the monetary foundation. The creeping erosion of institutional trust –from central banks to political institutions, the media, and the fiat money system itself – is the hidden driving force behind many developments.
The cycles follow a pattern. The collapse of Bretton Woods in 1971–73, the Asian financial crisis of 1997, the global financial crisis of 2007–08, the Covid-19 pandemic of 2020–2022, and the geopolitical turning point of 2022 – each of these crises has confirmed gold as a monetary anchor. Those who know monetary history see patterns where others suspect chaos.
Central banks have switched sides. After two decades as net sellers, the trend reversed fundamentally starting in 2010. Since then, central banks have cumulatively purchased over 7,000 t of gold on a net basis. The irony is striking: The very institutions that dismissed gold as a barbaric relic for decades are now the most aggressive buyers.
The East has replaced the West as the center of the gold market. China and India now account for over 50% of physical gold demand. What Frank Holmes called the “love trade” has evolved into a structural anchor of demand. At the same time, Asian stock markets are rapidly gaining importance. Pricing power is shifting eastward – and with it, the rules of the gold market.
Gold is not a “pet rock.” When we began writing about gold in 2007, we were met with skepticism from the mainstream. Yet the performance figures speak for themselves: almost +600% in US dollar terms, corresponding to an annualized growth rate of 10.8%. Gold has outperformed virtually every traditional asset class during this period.
The Austrian School of Economics was right. Credit expansion leads to misallocation, inflation, and crises. The cycle is following the Austrian script with a precision that has surprised even us. Financial repression – the systematic expropriation of savers through negative real interest rates – has become a permanent fixture.
De-dollarization is no longer a niche topic. In 2007, the US dollar accounted for nearly two-thirds of global currency reserves. Today, that share stands at less than58%. If gold reserves are included, it is only around 45%.
Trust is the monetary foundation. The creeping erosion of institutional trust –from central banks to political institutions, the media, and the fiat money system itself – is the hidden driving force behind many developments.
The cycles follow a pattern. The collapse of Bretton Woods in 1971–73, the Asian financial crisis of 1997, the global financial crisis of 2007–08, the Covid-19 pandemic of 2020–2022, and the geopolitical turning point of 2022 – each of these crises has confirmed gold as a monetary anchor. Those who know monetary history see patterns where others suspect chaos.
Central banks have switched sides. After two decades as net sellers, the trend reversed fundamentally starting in 2010. Since then, central banks have cumulatively purchased over 7,000 t of gold on a net basis. The irony is striking: The very institutions that dismissed gold as a barbaric relic for decades are now the most aggressive buyers.
The East has replaced the West as the center of the gold market. China and India now account for over 50% of physical gold demand. What Frank Holmes called the “love trade” has evolved into a structural anchor of demand. At the same time, Asian stock markets are rapidly gaining importance. Pricing power is shifting eastward – and with it, the rules of the gold market.