Podcast Summary: Why Gold Still Holds Glitter in Markets
Podcast: Thoughts on the Market
Host/Guest: Amy Gower, Morgan Stanley's metals and mining commodity strategist
Date: September 10, 2025
Episode Overview
This episode features Amy Gower, who discusses gold’s evolving role in global markets. While gold has long been seen as a hedge during turbulent times, its functions and drivers in 2025 are broadening. Amy explores recent price surges, central bank involvement, ETF flows, consumer demand, and the potential impact of future central bank policy on gold and silver.
Key Discussion Points & Insights
1. Gold’s Broadening Role in Markets
- Gold is “more than just a safe haven,” serving as a market barometer for factors beyond inflation—such as central bank moves and geopolitical risks.
- Quote: “Investors are watching gold not just as a hedge against inflation, but as a barometer for everything from central bank policy to geopolitical risk.” (00:22)
2. Dramatic Year-to-Date Gains
- Gold and silver prices up by 39% and 42% respectively in 2025.
- Quote: “Gold and silver have both already clocked up hefty year to date gains of 39 and 42% respectively.” (00:37)
3. Central Bank and ETF Demand
- Central banks are on pace for another year of strong gold buying.
- Gold now represents a larger share of reserves than Treasuries for the first time since 1996.
- Quote: “With gold now representing a bigger share of central bank reserves than Treasuries for the first time since 1996, this is a strong vote of confidence in gold's long term value.” (00:50)
- Gold-backed ETFs saw $5 billion in August inflows, marking record-high institutional interest outside of 2020.
- Quote: “Gold backed exchange traded funds or ETFs saw inflows of $5 billion in August alone, with the year to date inflows the highest on record outside of 2020...” (01:03)
4. Resilience Amid High Inflation and Rate Speculation
- Despite being a non-yielding asset, gold’s popularity persists with inflation still above target.
- Investors are increasingly betting on imminent rate cuts, which could push gold even higher.
- Projected 5% further upside, potentially reaching $3,800/oz by year-end—a new all-time high.
- Quote: “Investors are betting that central banks may soon have to cut rates which could further boost gold prices.” (01:20)
- Quote: “If in fact from here we see around 5% further upside to gold by year end to $3,800 an ounce, which would be a new all time high.” (01:32)
5. The Uncertain Jewelry Demand Component
- Jewelry accounts for 40% of gold and 34% of silver demand.
- Recent high prices have dampened jewelry demand, with Q2 gold jewelry demand at its lowest since Q3 2020.
- Quote: “Jewelry demand is already showing signs of weakness. Second quarter gold jewelry demand was the worst since the third quarter of 2020...” (01:55)
6. Industrial Support and New Catalysts
- Despite weak jewelry demand, silver remains buoyed by strong solar industry demand.
- Both metals lacked new catalysts until recently but now stand to benefit from expected rate cuts and dollar weakness.
- Quote: “Silver continued to grind higher, supported by strong demand from the solar industry as well.” (02:15)
- The Fed is expected to cut rates for the first time since December 2024.
- Historical context: Since the 1990s, gold and silver have risen 6% and 4% on average following Fed rate cutting cycles.
- Quote: “If we look back to the 1990s, on average, gold and silver prices have risen 6 and 4% respectively in the 60 days following the start of a Fed rate cutting cycle...” (02:37)
7. Global Context: India’s Role and Dollar Weakness
- India’s gold and silver imports improved in July, potentially boosted further by tax reforms ahead of festival and wedding season.
- A weaker dollar is expected to ease price pressures in non-dollar economies.
- Quote: “Our FX strategists also expect further dollar weakness, which should ease some of the price pressures for holders of non dollar currencies.” (02:56)
- Quote: “India is looking also to reform its goods and services tax, which could free up purchasing power for gold and silver ahead of festival and wedding season.” (03:07)
8. Outlook & Risks
- Gold is favored over silver, but both have a positive outlook in current conditions.
- Risks: Market surprises (e.g., higher rates instead of cuts) could temper gold’s momentum.
- Quote: “Of course, precious metals are not risk free, prices can be volatile and if central banks surprise the market with higher interest rates, gold in particular could lose some of its lustre.” (03:32)
Notable Quotes & Memorable Moments (with Timestamps)
- “Gold has always been the go to asset in times of uncertainty. But in 2025 its role is evolving.” (00:14)
- “With gold now representing a bigger share of central bank reserves than Treasuries for the first time since 1996, this is a strong vote of confidence in gold's long term value.” (00:50)
- “If...we see around 5% further upside to gold by year end to $3,800 an ounce, which would be a new all time high.” (01:32)
- “Jewelry demand is already showing signs of weakness...consumers reacted to high prices.” (01:55)
- “Both gold and silver should continue to shine.” (03:48)
Important Segments & Timestamps
- 00:14 – Gold’s evolving role beyond safe haven
- 00:37 – Review of 2025 gold/silver price surges
- 00:50 – Central bank buying and significance in reserves
- 01:03 – ETF inflows and renewed institutional interest
- 01:20 – Gold’s resilience with inflation/high rates
- 01:32 – Forecast: $3,800/oz gold by year-end
- 01:55 – Jewelry demand weakness
- 02:15 – Silver’s industrial support
- 02:37 – Historical metals performance after Fed rate cuts
- 02:56 – Dollar weakness and India’s growing demand
- 03:32 – Highlighting key risks and uncertainties
Tone & Language
Amy delivers the analysis in clear, succinct, and authoritative language, favoring a balanced, data-driven perspective while communicating market uncertainties and potential scenarios for precious metals in 2025.