This CIO Says Count on Dollar Recklessness to Keep Gold Surging

The persistent strength of the current gold rush as well as strategists’ confidence it will continue are rooted are attributable to a single, simple reason: namely, the foundational drivers responsible for triggering the metal’s epic run remain every bit as robust today as they were when this all started.

And in the opinion of David Miller, chief investment officer at boutique mutual fund family Catalyst Funds, one driver, in particular – the demand for gold as a dollar alternative – could prove to be the biggest source of price momentum for the foreseeable future.

Catalyst Funds’ Miller: Lowering Exposure to Weaponized Dollars Remains Prominent Concern of Central Banks

In a recent interview with Kitco News, Miller said the desire of central banks to insulate themselves against the risk of suffering dollar-based sanctions by dumping greenbacks for politically neutral gold remains a paramount consideration. Currently, one-third of all countries are operating under U.S. sanctions, including, of course, Russia, which saw roughly half of its total foreign exchange reserves…$300 billion…frozen by the West in 2022 as punishment for Moscow’s invasion of Ukraine.

In Miller’s assessment, the apparent glee with which the U.S. has come to weaponize its currency makes lowering dollar exposure in favor of gold a no-brainer for central banks.

“If you’re a central banker outside the U.S., why would you want your reserves in dollars when we’ve shown we’re willing to take those dollars away if you do something we don’t like?” he said.

Central Banks Also Concerned About Impacts to Dollar From “Deliberate Debasement”

Miller notes that central banks also are losing confidence in the dollar because of America’s agenda of currency debasement. Strategic debasement can reduce the real value of the debt, thus making it easier to repay in the future with less-valuable dollars. A weaker dollar also can make U.S. goods cheaper – and thus more competitive – abroad. The consequences of such a strategy can be severe, however, and may include inflation; greater loss of confidence in what remains, for the moment, the world’s primary reserve currency; and the market distortions that can arise from artificially low interest rates.

Still, “the U.S. is deliberately debasing its currency by running very significant deficits,” Miller said, adding:

“There’s no indication the government intends to pay that debt down.”

David Miller encourages investors to pay attention to both the expected impact that persistent central bank gold-buying…which exceeded 1,000 metric tons in each of the past three years…is likely to have on gold prices, as well as what central banks’ inclination to help safeguard their reserves with gold says about the metal’s capacity to protect their own holdings.

“I’d rather denominate my portfolio in gold,” Miller declared.

A sentiment for others to consider in this period of exceptional uncertainty?

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

January 9, 2026

Sign of the Times: Historic Harvard Endowment Makes First-Ever Allocations to Gold, Bitcoin

Among the most prominent reasons for gold’s impressive run in recent years is the metal’s increasingly enthusiastic embrace by institutions historically disinclined to buying – or buying much of – it.

Take central banks. After long avoiding making meaningful allocations to gold, central banks have remained net purchasers of gold since 2010, when the world was still mired in the depths of the financial crisis. But since 2022, when Russia saw roughly half of its sovereign assets frozen by the West as punishment for Moscow’s invasion of Ukraine, central bank demand for counterparty-risk-free gold demand has remained at or near record levels.

Other historically gold-averse institutional investors, such as asset managers and hedge funds, have been making strategic turns to gold, as well, amid mounting concerns over the degree to which intensifying economic, fiscal and geopolitical uncertainty could diminish the returns of portfolios predominately populated by conventional assets.

“Uncertainty is at the core of [why] hedge funds are turning to gold,” notes Joseph Cavatoni, senior market strategist at the World Gold Council.

And it seems the enthusiasm of larger investors to utilize alternative assets like gold for the purpose of diversifying their overall holdings is spreading further still…including to one particularly storied portfolio that has never previously owned precious metals: the endowment fund of Harvard University.

Harvard Management Company Embraced High-Profile Alternative Assets With Both Arms Last Quarter

According to its most recent 13F filings with the Securities & Exchange Commission, Harvard Management Company (HMC) – the wholly owned subsidiary of Harvard University charged with managing the endowment – bought 333,000 shares of SPDR Gold Shares (NYSE: GLD), which is the world’s largest and most notable gold-backed exchange-traded fund (ETF). The purchase marked the portfolio’s first-ever allocation to gold…an allocation valued at around $105 million, currently.

Clearly, HMC strategists were of a mind to dip more than a big toe in the alternative-asset waters last quarter. In addition to the sizable gold purchase, the endowment – which had slightly more than $53 billion under management at the conclusion of fiscal year 2024 – bought 1.906 million shares of BlackRock’s iShares Bitcoin Trust (IBIT). Right now, that position is worth roughly $121 million.

Also worth noting are the strategic revisions HMC made to its technology holdings in Q2. The fund reduced its allocations to Alphabet by 10% and Meta by 67%, while dumping its positions in Uber, Rubrik and the Invesco QQQ ETF altogether. At the same time, HMC made significant additions to its positions in select high-profile tech companies, including a 30% increase in its allocation to Nvidia as well as a near-50% increase in Microsoft.

Indeed, HMC’s Microsoft position is now the fund’s largest; 623,000 shares, valued around $317.5 million as of this writing.

Rutgers Professor: “Expanding Money Supply” Likely Driving Investors Such as Harvard Endowment to Seek Out Perceived Stores of Value

As for the substantial positions in gold and bitcoin suddenly taken by the fund, HMC has not publicly addressed its reasons for the allocations…but observers suggest that at least some of the same motivations prompting large institutions to invest in these outside-the-box assets are being felt, as well, by the captains of the endowment.

“Since the money supply has expanded dramatically around the world, especially since the pandemic, some investors are looking at gold and cryptocurrencies as a store of value,” wrote Rutgers Business School Professor John M. Longo in a statement about HMC’s alternative-asset allocations.

As for gold, specifically, it’s hard to imagine the metal’s exceptional record of resilience in recent years has gone unnoticed by HMC fund managers. Since the beginning of 2022, gold has climbed nearly 90%, outperforming conventional assets by a substantial margin. And since January of last year, gold has achieved new all-time highs nearly 70 times.

Ultimately, however, it’s the reasons underpinning these performance numbers which surely lie at the heart of HMC’s decision to buy gold. Rutgers’ Professor Longo referenced intensified currency debasement and its inflationary implications as one. But there are a host of others, including ever-worsening geopolitical tension around the world.

Analysts expect multidimensional global uncertainty – comprised of numerous economic, fiscal and geopolitical factors – to grow further still. Should that happen, it’s reasonable to believe gold…seen by many as the quintessential safe-haven asset…will continue to strengthen.

And that potential (likely?) outcome is something which likely hasn’t escaped the notice of endowment fund managers, either.

August 27, 2025

Economic Week in Review: Federal Reserve Stands Pat, Retail Sales Disappoint, Housing Looks Glum, and More

Hello, my friends! Let’s get right into it…

Fed Leaves Rates Unchanged Once Again, but Still Sees Two Cuts by the End of the Year

Among the biggest news of the week was the widely anticipated decision of the Federal Open Market Committee (FOMC) – the policymaking arm of the Federal Reserve – to hold the federal funds rate at a target range of 4.25%-4.5%, where it’s resided since December.

As has been the case with so many of these FOMC meetings of late, observers were less interested in the entirely expected rate decision, and more curious about the accompanying narrative – including the Fed’s updated Summary of Economic Projections – to get an idea of where policy may be headed.

According to the summary, committee members still are expecting two quarter-point rate reductions before 2025 comes to an end, perhaps a surprise to some who’ve noted the central bank’s reluctance to seriously entertain cuts until it’s satisfied tariff impacts are likely to be negligible.

One significant change that was made to the formal outlook is that Fed officials decreased the number of cuts anticipated in 2026 and 2027 from three to two in each year, implying we’ll see no more than a full percentage point reduction through the foreseeable future after 2025.

As for what’s in store for the rest of this year, while the summary suggests two rate reductions are still in the bullpen, investors should be mindful that’s in no way a done deal.

For one thing, the number of policymakers who said they favor no cuts this year is now at seven, up from the four who said so in March. And for another, Fed Chair Jerome Powell, during his post-meeting press conference, reiterated that the central bank will take as much time as it feels is necessary before deciding to make any material changes to policy, saying, in part:

“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies.”

Retail Sales Tank a Worse-Than-Expected 0.9% Last Month

In other news, May retail sales figures disappointed even those who already were expecting sad-looking numbers heading into the week.

On Tuesday, the Commerce Department revealed that headline retail sales sank 0.9% last month, below the 0.6% decline projected by Dow Jones. Adding insult to injury, last month’s extra-disappointing result comes on the heels of a downwardly revised 0.1% drop in April.

Pull automobiles out of the equation, and sales still dropped, tumbling 0.3% instead of rising 0.1%, which is the number economists had anticipated.

Notably, sales of the control group, which excludes autos, gas, building materials and food services, rose 0.4% last month after falling 0.1% in April.

In his overall assessment of the May sales numbers, Michael Pearce, deputy chief economist at Oxford Economics, suggested, “There are few signs yet that tariffs are leading to a general pullback in consumer spending, but added:

“We expect a more marked slowdown to take hold in the second half of the year, as tariffs begin to weigh on real disposable incomes.”

Sentiment Among the Nation’s Homebuilders Is Getting Worse

Also this week, we were given a couple of updates on health of the nation’s housing market, neither of which seemed to inspire any confidence in the sector’s near-term prospects.

First up was the Housing Market Index for June, released on Tuesday by the National Association of Home Builders (NAHB).

According to the data, the index – which measures homebuilder sentiment on a scale of zero to 100 – declined two points this month to land at 32. Economists had expected the metric to come in at a modestly better 36.

Now far below the threshold level of 50 that distinguishes homebuilder pessimism from optimism, the index is, in fact, at its lowest value in 2½ years.

The association pointed to persistently uncooperative mortgage rates and equally persistent concerns about the economy’s near-term stability as principal factors in the feeble index reading. In a statement, NAHB chief economist Robert Dietz said, in part, “Given current market conditions, NAHB is forecasting a decline in single-family starts for 2025.”

Housing Starts in May Sink to Lowest Level in Five Years

Then on Wednesday, the Census Bureau effectively reiterated the NAHB’s dour outlook for housing when it revealed that new construction of privately owned units came in at a seasonally adjusted annual rate of 1.25 million last month. Not only is that below the 1.36 million projected by economists, but it’s also a sharp 9% drop from April’s 1.39 million starts. In fact, the May number is the lowest level for housing starts in five years.

It’s worth noting that the principal culprit of last month’s anemic overall numbers was a whopping 30% drop in starts of multifamily housing – duplexes, townhouses and apartment buildings, for example.

Indeed, the pace of new single-family home construction ticked up 0.4% on a monthly basis in May, to land at a seasonally adjusted rate of 924,000. Year over year, however, that number represents a decline of 7.3%. And single-family building permits, which are signs of future construction, sank 2.7% from April and 6.4% from May 2024.

With mortgage rates expected to remain elevated and tariffs on lumber, aluminum and steel in full effect, analysts see little reason to expect housing-start numbers to turn around anytime soon. In fact, said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets:

“We appear on course for a substantial decline in real activity in the current quarter and perhaps further weakness in the summer.”

May Leading Economic Index Adds to Growing “Slowdown” Narrative

Finally this week, The Conference Board reported on Friday that its widely followed Leading Economic Index (LEI) declined by 0.1% in May, to a measure of 99.0. The reading missed economists’ projections of an increase by 0.1% and follows a downwardly revised drop in April by 1.4%.

Of some concern to analysts are the broader trends demonstrated by the LEI in recent months amid other signs of a slowing economy. The May result represents the fifth straight month the index has dropped. Moreover, the index has declined by 2.7% over the previous six months (through May), a markedly faster pace than the 1.4% contraction that took place over the previous six months.

In a statement accompanying the release of the May reading, Justyna Zabinska-La Monica, senior manager of business cycle indicators, at The Conference Board, said, in part:

“With the substantial negatively revised drop in April and the further downtick in May, the six-month growth rate of the Index has become more negative, triggering the recession signal. The Conference Board does not anticipate recession, but we do expect a significant slowdown in economic growth in 2025 compared to 2024, with real GDP growing at 1.6% this year and persistent tariff effects potentially leading to further deceleration in 2026.”

That’s it for now; have a fantastic weekend!

This post is created and published for general information purposes only. The Gold Strategist blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

June 21, 2025