Bank of America’s Michael Widmer Says Actual Investors Are Yet One More Driver Poised to Push Gold Even Deeper Into Record Territory

Back in February, UBS strategist Joni Teves had this to say about the notion that gold is “due” for a significant pullback simply because it had been so strong for so long:

“It is always tricky to chase the market higher and [it’s] uncomfortable when everyone seems to be on the same side of the trade. But it also does not make sense to call for the end of gold’s bull run simply because it has reached yet another record and has already rallied 10% YTD (year to date).”

Of course, since she said this, gold has climbed substantially higher, rising to slightly more than 70% year to date. But that it has continued surging to well above $4,000 and well into record territory still does not, in my opinion, diminish the validity of her central belief on this topic: that gold’s epic bull run will come to an end only when the underlying drivers responsible for the metal’s years-long surge also come to an end – and until they do, it’s just not reasonable to expect gold to do anything other than keep climbing.

As it happens, other high-profile metals analysts are of the same opinion…including Michael Widmer, head of metals research at Bank of America, who said as much in a recent webinar.

Widmer: Gold Is “Overbought…but Underinvested”

In fact, Widmer suggested, not only do all of gold’s well-documented drivers – such as aggressive central-bank buying – remain very much intact, but there’s still another driver yet to materialize that could prove to be one more powerful source of energy for the long-running gold bull: a comprehensive rotation into gold by serious investors.

“I’ve highlighted before that the gold market has been very overbought,” Widmer clarified during his webinar. “But it’s actually still underinvested. There is still a lot of room for gold as a diversification tool in portfolios.”

Overbought…but still underinvested. What Widmer means is that while gold has enjoyed tremendous popularity with not only central banks but also highly kinetic traders and speculators, it still remains largely absent from the portfolios of true investors – particularly those of the high-net-worth variety.

In his presentation, the strategist noted that specific investment demographic has only 0.5% of their assets allocated to gold currently, despite the metal’s historic price performance over the last several years.

30% Gold Allocation Right Now Is “Justifiable”

“When you run the analysis since 2020, you can actually justify that retail investors should have a gold share of well above 20%,” he said. “You can even justify 30% at the moment.”

Widmer believes the return of a structural rate-cut regime – something that does have the potential to prompt traditionally real-asset-averse investors to consider precious metals – could catalyze a wider and more comprehensive investment-based rotation into gold.

“You don’t even need to see cuts at every meeting,” Widmer contended. “You just need to see that rates are going down.”

Widmer believes a rate-cut-cued rotation into gold by actual investors…many of whom remain woefully underallocated to the metal…may be the key to seeing the metal reach the once-mythic price of $5,000 before the end of 2026.

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.

December 19, 2025

Invesco Survey Provides More Evidence That Vigorous Central Bank Gold Demand May Be Here to Stay

Amid growing speculation that the most feared outcomes of White House tariff policy may not come to pass, after all, some analysts are suggesting gold may be nearing the end of its epic bull run.

Indeed, a number of observers have gone on the record with projections that the price of gold could decline as much as 30% from current levels.

It very well could be the case that gold’s more recent and acutely dynamic catalysts are in the throes of weakening. But even if that is so – and it’s too soon to know, for sure – it remains difficult to argue against a continued structural bull case for gold…one that’s been exceptionally well-supported in recent years by central bank demand.

And as the freshly published 2025 Invesco Global Sovereign Asset Management Study makes clear, it’s a demand that’s poised to continue as central banks continue to adjust for the unprecedented levels of multidimensional uncertainty that now characterize the economic and geopolitical landscape.

Report: “Temporary Post-Pandemic Disruptions” Now Permanent

Detailing the macro components of the worldwide economic paradigm shift that’s prompting central banks to rethink how they manage their reserves, the report says, in part:

“What many had hoped were temporary post-pandemic disruptions have crystalized into enduring structural features. Geopolitical tensions, persistent inflation pressures, and fragmented global trade patterns are now recognized as permanent elements shaping long-term investment strategy rather than cyclical headwinds.”

And one way in which the overseers of the world’s economies are responding to this array of structural challenges is by making greater use of gold, an asset that’s enjoyed universal regard as an apolitical, counterparty-free medium of exchange and store of value for millennia.

“Gold is a diversifier,” one Latin America central banker crowed to Invesco, “but it’s also a form of protection and a backstop if all else fails.”

Nearly Half of Central Banks Expect Their Own Gold Reserves to Rise Over the Next Three Years

This affection for gold among the world’s most prominent and influential banking institutions is pervasive. According to the survey data, 86% of central banks reported holding gold currently, while 47% said they plan to increase their allocations over the next three years.

Ownership of physical bullion is expected to remain a centerpiece of central bank reserves risk-reduction strategy through the foreseeable future. That said, roughly 20% of institutions surveyed by Invesco also said they plan to utilize multiple financial instruments…including swaps, derivatives and/or gold ETFs…to more tactically manage their exposure to the metal in the coming years.

“We aren’t selling physical gold,” one European central banker explained, “but we use swaps and futures to fine-tune exposure and generate modest returns.”

It’s a more “fleet-of-foot” approach to incorporating a naturally staid asset such as gold in reserves, but one that could gain increasing favor should the operating environment continue to grow in complexity.

Clear Majority of Respondents to World Gold Council Central Bank Survey See Gold Reserves Rising and Dollar Reserves Falling From Here

Publication of this year’s Invesco study comes on the heels of the World Gold Council’s 2025 Central Bank Gold Reserves Survey, the results of which draw similarly robust conclusions about anticipated gold demand and general amenability to the metal as a portfolio aid:

95% of central banks see overall gold reserves among the institutions rising over the next 12 months.
43% of central banks believe their own gold reserves will rise over the next 12 months…with none expecting a decline in their gold inventories.
76% of central banks expect overall gold reserves to rise over the next five years.
73% of central banks project a continued decline in dollar reserves over the next five years.

Notable, too, is that the World Gold Council’s survey found a nearly 20% increase in the number of central banks that said they’re actively managing their gold reserves in 2025 versus the number that said they were doing so last year, largely mirroring the growth rate anticipated by respondents to the Invesco survey.

Many of those who make a long-term structural case for gold point to a projected continuation of substantial central bank demand as a cornerstone reason for their optimism. That certainly makes sense, particularly considering the significant price support that central bank purchases at or near annual record levels have lent to the metal since 2022.

Gold’s True Structural Case Is Found Not Merely in Central Bank Demand…but in the Profound Reasons for It

But I happen to think the most deeply rooted structural case for gold is found not merely in central bank demand, per se – as profound a driver as that is – but in the reasons for that demand. The two most prominent reasons for their gold-buying cited by central bank respondents to the Invesco survey are the metal’s potential to serve as a “safe haven during financial instability” as well as “concerns over geopolitical instability.” For their part, respondents to the World Gold Council’s survey said “gold’s performance during times of crisis” and its utility as an “effective portfolio diversifier” are the two biggest factors in their decision to hold the metal in reserves.

Yes, central banks are buying a lot of gold. But the unmistakable, overarching reason they’re doing so is what investors should take most to heart: the institutions’ collective expectation that comprehensive uncertainty of multiple dimensions will continue to characterize the global economic, fiscal and geopolitical landscapes for the foreseeable future.

It is uncertainty that’s poised, in my opinion, to not only push gold further into record territory in the years to come…long after current tariff drama has dissipated…but to also greatly reduce the metal’s downside risk and otherwise keep it well-supported during periods of profit-taking and technical weakness.

July 25, 2025

Gold’s Improving Viability as a Long-Term Asset

Is gold on the way to becoming a universally regarded core portfolio component – even a mainstream asset?

Among the more compelling pieces of evidence in support of that idea is the metal’s improving reliability as a long-term capital appreciation instrument, a virtue highlighted in a recent Forbes piece by Alex Shahidi, managing partner and co-CIO at Evoke Advisors.

“Since 1971, when the U.S. came off the gold standard, the precious metal has delivered strong, competitive returns,” Shahidi writes, “nearly matching global equities over the long term, with annualized returns of 8.4% compared to 9.2% for global stocks.”

Shahidi’s assessment comes on the heels of a similar conclusion drawn by the World Gold Council. In a report published earlier this year on gold’s appropriateness as a strategic long-term asset, the WGC said:

“Looking back over more-than half a century since the US gold standard collapsed in 1971, the price of gold in US dollars has increased by 8% on an annualized basis – a performance comparable with that of equities and higher than that of bonds over the same period.”

The WGC also crowed about gold’s “shining” performance through a variety of more recent time frames, noting:

“Gold has performed well over the past 1, 3, 5, 10 and 20 years, despite the strong performance of risk assets.”

Analyst: Since Millennium’s Start, Gold Has Returned 10.1% Annually vs. 5.9% for Global Equities

Of particular note is just how well gold has performed since the beginning of the millennium, something else of which Shahidi makes specific mention:

“Notably, since the turn of the millennium, gold has significantly outpaced equities, delivering 10.1% annual returns versus just 5.9% for global stocks, by my calculations. This remarkable track record highlights gold’s enduring value as an investment, especially in the modern era.”

Gold’s impressive performance numbers over the last quarter-century highlight something else: the significantly greater prominence of uncertainty on the global economic and geopolitical stage.

To be sure, gold has a multitude of impactful drivers…including consumer demand, which is an influence that’s far more relevant during robust economies; not exactly the periods during which a perceived safe-haven asset is expected to thrive.

In fact, the WGC details, consumer demand – rooted in gold’s utility to both the technology and jewelry industries – accounts for roughly 40% of the metal’s overall demand.

Still, it remains gold’s appeal as a crisis asset…an asset inherently poised to strengthen amid distress, both real and feared…that appears to be its most dynamic catalyst. And in an environment characterized by greater overall and chronic uncertainty, one might expect gold to, in turn, post better numbers over extended periods.

Coincidence? Gold’s Long-Term Performance Has Improved With the Surge in Global Uncertainty

That’s exactly what it’s been doing. As Alex Shahidi points out, gold has managed to best global stocks – in terms of average annualized returns – by roughly 70% since 2001; a period, not so coincidentally, that has seen popular uncertainty metrics – including the World Uncertainty Index and Economic Policy Uncertainty Index – rise to their highest recorded levels, fueled by a seemingly endless string of profound global shocks that include:

the 9/11 attacks;
the global financial crisis;
the COVID-19 pandemic;
Europe’s largest ground war since World War II;
and obscene levels of fiscal profligacy poised to trigger a massive global debt crisis.

Chart courtesy of Economic Policy Uncertainty

Central Banks Have Been Net Purchasers of Gold Every Year Since 2010

It is, in fact, this rising uncertainty – particularly that which threatens dollar reliability and stability – that’s largely responsible for another highly impactful source of gold demand: central banks. Central banks have been net purchasers of gold every year since 2010. And since 2022…the same year Russia saw half its global reserves frozen by the West as punishment for Moscow’s invasion of Ukraine…central bank gold demand has been at or near record levels, something Alex Shahidi references in his public embrace of the metal.

“With its surprisingly strong historical returns over the long run, high liquidity and strong central bank support, it can be a valuable portfolio tool that offers diversification, inflation protection and stability during market turmoil,” Shahidi writes, adding:

“While not a conventional holding for all investors, gold’s unique attributes and proven track record make it worth considering as part of a well-diversified investment portfolio.”

For that matter, Shahidi’s pro-gold posture is hardly “conventional” for a key person at a billion-dollar asset manager. But in the words of the immortal Bob Dylan, the times they are a-changin’. And the way in which they’re “a-changin’” suggests the possibility that uncertainty might become a permanent part of the global landscape.

Should that disconcerting eventuality come to pass, then gold may be viewed not only as a standard portfolio holding, but also as a hedge deemed so critical that those advisors who opt against owning it on behalf of their clients could one day be seen as negligent for refusing to do so.

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.

July 1, 2025