Podcast Summary: Bloomberg Talks – James Steel Talks Gold

Date: February 2, 2026
Host: Bloomberg Interviewer & Co-Host
Guest: James Steel, Chief Precious Metals Analyst at HSBC

Episode Overview

In this episode, Bloomberg’s hosts speak with James Steel, HSBC’s Chief Precious Metals Analyst, for an in-depth discussion about the extraordinary volatility recently seen in the gold and silver markets. They explore what’s driving the rapid price swings, how today’s gold markets compare to previous eras, and what might be on the horizon for gold prices through 2026. The conversation covers central bank buying, supply and recycling dynamics, and the limited broader economic impact of precious metals.

Key Discussion Points & Insights

1. Recent Volatility in Gold & Silver Markets

• Crowded Trade and Profit-Taking:
  • Steel attributes the recent sharp corrections to new investors flooding into the market, which naturally breeds volatility and profit-taking.
  • Quote:
    • "Any commodity that has this parabolic rally that gold and silver had—and the new entrants into the market, which they were flooding in... it really does invite a volatility, and B, profit taking, stroke, liquidation on any news or developments that run counter to gold." – James Steel (01:13)
• Scale of the Move:
  • Gold made 54 new highs last year. Despite extraordinary price action, Steel cautioned that gold hadn't truly reached a new inflation-adjusted high until it surpassed the 1980 level in today’s dollars (approximately $3,400/oz).
  • Quote:
    • "I always cautioned everybody, I said, look, it's not a new high until we go above in real terms what it was in 1980. In January of 1980, gold hit $850 an ounce and that's about $3,400 in today's market." – James Steel (02:04)

2. Comparing Past and Present Market Rallies

• 1980 vs. Today: The 1980 rally was narrower, driven by a handful of players (notably the Hunt Brothers), whereas today the rally is broad-based with greater participation.
• The volatility now includes price swings as large as the entire price of gold when Steel first began covering the market.
  • Quote:
    • "We had a swing in a couple of days that was equal to the absolute number that gold was trading at when I started covering it." – James Steel (03:17)

3. Price Levels & Targets for 2026

• Gold recently peaked above $5,500/oz before pulling back to around $4,750/oz; silver lost 30% of its value in three days.
• Steel’s year-end projection:
  • High: $5,500/oz
  • Average: Near current (~$4,750/oz)
  • Downside risk: As low as $4,000/oz if major positive developments occur.
  • Factors supporting ongoing strength: expectations for a moderately softer dollar and renewed central bank buying.
  • Quote:
    • "In 22, 23, 24, almost one out of every three ounces of gold that came out of the ground went into a central bank vault. Double or triple the average for the previous 10 years." – James Steel (04:13)

4. Supply, Mining, and Recycling

• Slow Production Response:
  • Unlike oil, new gold mines take decades to come online due to permitting, exploration, and regulatory hurdles.
    • Quote:
      • "By the time a group of geologists said, I think there's some gold here to the time when it went round your finger or your neck was about 10 years. [...] It's closer to 20 now." – James Steel (04:54, 05:10)
• Recycling as a Buffer:
  • Gold is never consumed; it is stored and can be recycled. Recycling has risen, but not as much as anticipated, as holders wait for higher prices.
    • Quote:
      • "What is flexible is recycling. Because gold, unlike oil and grain, is never consumed. It's stored somewhere." – James Steel (05:16)

5. Broader Economic Impacts

• High prices have reduced jewelry demand, now just 35% of global gold consumption (down from ~50%).
• Coin demand has also dropped, yet overall, gold doesn’t usually drive macroeconomic trends—it reacts to them.
  • Quote:
    • "Gold does not have huge macroeconomic impacts. It reacts to macroeconomics. It doesn't set. It's not like oil. It doesn't set the stage. It reacts to the stage." – James Steel (06:34)
• The price of gold can serve as a signal of heightened geopolitical or economic risk, even if those risks don’t materialize.

Notable Quotes & Memorable Moments

• On the uniqueness of today’s gold rally:
  • "The difference between now and 79 was limited number of buyers at that time... but also a much more broad based [church] this time." – James Steel (02:40)
• On central banks driving the rally:
  • "Almost one out of every three ounces of gold that came out of the ground went into a central bank vault." – James Steel (04:13)
• On the lag in new mine production:
  • "Exploration permitting, et cetera, et cetera, it's closer to 20 now. It takes a very long time." – James Steel (05:10)
• On gold’s limited economic impact:
  • "Gold does not have huge macroeconomic impacts. It reacts to macroeconomics. It doesn't set the stage. It reacts to the stage." – James Steel (06:34)

Important Timestamps

• 01:13 – Steel explains the immediate drivers of gold/silver volatility
• 02:04 – Contextualizing today's rally versus 1980
• 03:17 – Historical perspective on current volatility
• 03:43 – Gold/silver price levels, forecasts, and central bank demand
• 04:54 – Gold supply: mining versus oil production
• 05:16 – The significance of gold recycling
• 06:34 – Gold’s impact on the broader economy and indications of macro risk

Conclusion

James Steel delivers a clear-eyed analysis of today’s historic volatility in gold and silver, stressing the roles of broad investor participation, central bank buying, and supply constraints. While he forecasts ongoing turbulence and emphasizes gold’s value as a macroeconomic signal, he downplays its direct economic influence. The conversation is steeped in context, helping listeners make sense of record-breaking market moves and what might come next.