Outpoll | Gold Isn’t Overpriced on Purchasing-Power Test, BlackRock’s Evy Hambro Says

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Gold Isn’t Overpriced on Purchasing-Power Test, BlackRock’s Evy Hambro Says

Gold Isn’t Overpriced on Purchasing-Power Test, BlackRock’s Evy Hambro Says

2 days ago7 min read4 comments

In a financial landscape where every basis point is scrutinized and every market tremor analyzed, BlackRock’s Evy Hambro has reframed the entire conversation around gold’s valuation with a simple yet profound pivot: stop obsessing over the nominal price and start focusing on what the metal actually buys. During a compelling Bloomberg Television interview this Tuesday, the Global Head of Thematic and Sector Investing cut through the noise that typically surrounds the precious metal, arguing that internal comparisons at the world’s largest asset manager reveal gold’s purchasing power remains robust, stretching further than many traditional metrics might suggest.This isn't just a debate for gold bugs and permabears; it's a fundamental reassessment of value in an era defined by persistent inflation, geopolitical fissures, and a looming reevaluation of the US dollar's hegemony. When you look beyond the headline number—the dollar-per-ounce figure that flashes on trading screens—and instead measure gold against a basket of real assets, commodities, and even global equities, a different narrative emerges.Historically, gold has served as the ultimate store of value when confidence in fiat currencies wanes, and we are now witnessing a confluence of factors that could propel this ancient asset into a new supercycle. Consider the macroeconomic backdrop: central banks, particularly in emerging markets, have been net buyers of gold for over a decade, diversifying reserves away from US Treasuries as geopolitical tensions with Russia and China escalate.The Federal Reserve’s delicate dance with interest rates—signaling potential cuts even while inflation remains stubbornly above target—creates a perfect storm where the opportunity cost of holding non-yielding gold diminishes. This is a dynamic Warren Buffett, despite his historical skepticism of the metal, would appreciate: an asset whose value isn't derived from another's liability.Furthermore, the structural deficits in physical gold supply, compounded by dwindling discoveries and escalating extraction costs, provide a solid floor under its price. Hambro’s analysis suggests that if you measure gold not against a weakening dollar but against the cost of energy, industrial metals, or even global real estate, its current level appears justified, even conservative.This perspective is crucial for investors navigating a world where traditional 60/40 portfolios are failing as a hedge and where the very definition of 'safe haven' is being rewritten. The conversation is no longer about whether gold is in a bubble, but whether the market has fully priced in a paradigm shift in global monetary architecture. As institutional giants like BlackRock lend their analytical heft to this view, it signals a profound shift in the capital markets, one where gold transitions from a peripheral insurance policy to a core strategic holding in a multi-polar world.