I'm Charlotte Mloud with investingnews.com and here today with me is Joe Capatoni, senior market strategist, America's at the World Gold Council. Thank you so much for being here. Great to have you as always. >> It's great to be here, Charlotte. Thanks for having me back. [snorts] >> Of course. Always so good to be catching up with you. And it's only been a couple of months since we last talked, but there's been a lot going on with gold. We've seen the gold price get up to new


all-time highs, then pull back. And of course, last week we had a little bit of a rebound as the government shutdown in the US came to an end. So, I'm hoping you can start by helping us unpack the the key gold drivers that you are watching right now. >> Sure. You know, I think you've encapsulated it pretty well, which is we're having record setting levels that are touching and coming back off as really what I think is at the heart of all of this risk and uncertainty continues to get measured not only by


investors in the east, but now Western investors more prominently in the US trying to understand what risk assets in their portfolio will look like, how they'll perform. We've had pullback in equity markets now and actually you're starting to see the pronounced interest in gold really take take hold and again the investor interest is what's really moving us now. >> Yeah, I think we're definitely going to get into that investor interest angle. I want to unpack a little bit more before


we go there. What's happening with the the government shutdown? So as we know data, economic data has been quite scarce during this time and we're preparing right now to hopefully receive some more of it. So I'm wondering what you may be watching most closely in terms of that that data coming out of the US. >> Yeah, I think it's a really interesting point. You know, with with a lot of the challenges that have been created as a result of the US activity in terms of trade relations, tariffs, and even a


shutdown, what you end up with is risk and uncertainty. The ability for people to understand that, gauge that becoming much more challenging as data has been withheld or in is incapable of being produced for us. So those of those are the looking at that data intently trying to get a gauge of how the Fed likely will react or even just looking at data in general. For example, we haven't even seen the appropriate reports out of the CME in terms of open interest in terms of the open interest contracts. So all


this data is missing from our day. It's missing from our analysis. So we're actually left a little bit blind trying to make an the decision. So I think it's just made decision making more complicated. It's made risk and uncertainty higher. But now that we are back open at least until at least until January 30th of next year, we're hoping that the data will come to us. It's a big week for data this week in terms of uh just different different factors that people are going to be looking at and


that'll help us gauge whether or not the Fed looks likely to make a rate cut in December. Now look, they're cautioning too. They're saying like be careful, no foregone conclusions here. So I've not seen them that outspoken about rate cuts to date. So, it's actually been quite interesting to see how they're responding. >> It It has been quite interesting and and great point, the Fed is also looking closely for this data that we're all waiting for. Do you have any any


thoughts at the moment in terms of which way the Fed may lean in December? I know, as you just said, it seems that officials at the Fed are are divided. Any any initial thoughts from you that you can share right now? I I think it's a little hard to to judge right now without that clean, clear data giving us an indication. I would have been in the camp of saying I would have expected rate cuts to take place in December. But again, I'm going to basically step back and let the Fed uh speak to us once we


see more on the data front. They're signaling don't be so quick to conclude and don't position around concluding that there will be a rate cut. I think they're just trying to be very careful and cautious. But right now, I think that employment is a big key for them, and I think they're trying to really land on what the what the situation looks like, but they're also hellbent on making sure that the inflation number is in control. >> I'm just back from the New Orleans


investment conference, and of course, we're covering many topics there as well. And one point that came up frequently was the end of quantitative tightening and the potential start of quantitative easing in 2026 from the Fed. So, I wonder if that's something that's on your radar. Any any thoughts you would share on that note? >> Yeah, I I I think it's definitely hitting the radar. It's early to tell at this stage. And I think that right now the question of how the Fed basically


deploys its balance sheet is a big key component right now. I I think we have to just take time and let let data come through. Let let the market settle in a bit. I think what's more interesting to keep an eye on than just the Fed's action are company behaviors as a consequence of rates where they are today and the prolonged risk that could play out with bond issuance and the cost of sustainability of these debt levels that these companies have. how that factors into the risk of ri like


individual assets and risk in terms of equities and bonds more specifically because I think right now as people think through the gold transaction they think through the gold allocation they are looking at the shock factor that comes into their portfolio when risk moves and when risk moves it moves pretty substantially and I think right now they're looking at gold and saying hey look if I need to that that safe haven how should I think about it that that discussion around the Fed and their balance sheet that's a longer term


trajectory in terms of a discussion to have. >> Well, and maybe we talk a little bit more about how investors are adjusting their portfolios as they see this situation playing out. I know the World Gold Council recently had the the latest demand trends report come out and I believe it it notes that Q3 was a record quarter for demand. So, I'm wondering if you can unpack that and and explain where that was coming from. >> Sure. I think for sure it was a record for for for demand not only in tonnage


but also in terms of dollars spent to accumulate the gold which is actually obvious once you say it after you look at where the price is. But right now the big driving factor has been investment. It's been investment on a global scale. In particular it's coming through what we saw as a record quarter for ETF flows. Now this is a space in the market where we've been talking about how it's been flat to down in terms of tonnage uptake. dollars have been flat to up in terms of accumulation over the last


couple of years. But now at this stage, what we're seeing are record flows, not only in North America, but also in the Asian market. And actually Q3 and Europe was strong as well. You're looking at a record a record amount of flow in and not only the quarter, but also in the month of September. As investors are simply saying, like I said, looking at this moment of market correction, market risk. Am I looking at a potential for a bubble to pop and looking to definitely buy the right kind of allocation of gold


into their portfolio? >> So, we've got we've got now the Q3 numbers and I know it's it's of course too early to look at 2025 as a whole, but is there anything you can say in terms of these the demand numbers that you've been seeing? Can you say anything about what the full 2025 year could end up looking like? Yeah, I think it's a good question and obviously it's one that's on everyone's mind as we kind of get our monthly updates on data that we can get like


central bank demand and also ETF flows. You're seeing those two areas very strong. They're continuing to be strong. So that means that demand in the investment space and demand with central banks again top-notch in terms of what we're seeing and what we're expecting in terms of the trajectory. I think we'll likely come in a little below where we've seen the last 3 years for central banks but not by much. and well in in excess of what we've seen in terms of the 15 year 16ear trend. Uh the area


that we definitely know we're seeing some softness and we'll continue to see the softness is in jewelry. And I think it's interesting for us to see we have some seasonality that can play out in quarter 4, whether that's through special holiday seasons in the Asian region or actually going into the holiday season here in the US or Western markets or global. But let's see if the seasonality has had an impact on the jewelry demand. Our instinct right now is telling us that these high prices and


actually caution around investing in something like jewelry might still keep it suppressed. The only other factor that I'd raise for you Charlotte in terms of the demand flows is also just thinking on the other side supply and that fabrication side that actual side of recycling still isn't as large as maybe you would have expected in an environment where you have higher gold prices and likely people putting gold forward. So, I think people are still hanging on to their gold. They're not


actually looking to liquidate and take the money. They're sitting back and saying, "Hey, maybe there's more um room for this to go." >> Well, well, that's quite an interesting point in and of itself. And one one other point that I wanted to note with you as we're seeing more people come into the gold market. I'm noticing that people who have been in the sector for a while and investing in gold for some time are maybe a little bit nervous to see this more widespread interest where


they're used to seeing gold as a contrarian play and now with this this wider wider recognition of gold, it makes them feel a little a little nervous. So, I'm curious what you might say to somebody who's feeling like that. >> It's it's a really interesting point. I think that in addition to what you're highlighting in terms of those that have been there for a while and talking about the gold market. Um, you hear that as well from those that have traded the markets as well, like these numbers are


too high. They don't make any sense. We don't see the flows we've normally seen. And I think what people need to understand is a couple of different factors that are at play here. Number one, portfolio resilience and the actual interest in investors to understand how to make their portfolio as airtight as possible, which means including gold in real assets and alternatives at the consulting level and at the level of allocation analysis. That's a shift that's a shift in mindset that investors


have taken on that hasn't existed until today. So that's a big shift in the resilience question from investors and it's global too by the way not just a western phenomenon it's a global phenomenon for investment. Secondly I think the structural shift that central banks are talking to about adding gold as a component of their reserve portfolios. Now you can argue whether it's debasement or or dolization or fear of sanctions or whatever the case may be. The numbers speak for themselves. that


structural shift of saying there might there are no viable alternatives to the dollar or dollar based asset. So I'm looking at gold is that viable alternative. That's number one. That's number two in terms of the pronounced kind of shift and change. So when we talk to people and we say yes we haven't seen these numbers before. We haven't seen these highs before. Look at the look at the data. Look at the driving factors behind the use cases and you're going to understand that there's a shift


here which should give you comfort and confidence to make a decision on your entry point into the market and why you should be looking at gold and holding it longer term. Not just looking to do the trade. You know, you could have had a trade that you could have done last week where you could have made 5% in 5% out and actually we're not encouraging people to look at gold that way. If you want to trade it, you can. We're looking at the structural allocation that people should be putting into their portfolio.


And over the long term, you've got returns that rival that of equities at about 8 to 10%. >> Well, and and talking a little bit more about this mainstream gold that's happening right now. I wonder if you can talk a little bit more about maybe just how how far that could end up going because one of the the headlines that I've seen a lot is Morgan Stanley and the 602020 portfolio. And if if more people go in that kind of direction, that seems like it could be huge. And it seems like we're just in the beginning


of of everything that's going on for gold. So any any comments on that? >> Yeah, I I think you're right. And look, if you look at consensus, broad range consensus for the price outlook for gold amongst the leading analysts in the world for 2026, they range from 4,000 up to 5,300. So you're looking at a price appreciation of a reasonable level over the course of 2026. Now those numbers are just that they're expectations of where the price could go. And I think fundamentally what you have to


understand in that case is that the more that people are investing in gold, the more they're understanding its role, the more that there's a likelihood that the price support will continue to grow. And I think right now when it comes to allocations and it comes to understanding risk in a portfolio, that 20% that Morgan Stanley's amplifying is just that. It's saying, look, what are alternative ways for us to protect the portfolio while maintaining growth and it's actually looking at gold in that in


that light. So you're looking at something that's got the right kind of correlation behavior and the right kind of diversification benefits. And I think they're looking at it in the context of that allocation versus just staying in bonds and equities and the correlation behaviors of those two assets. And I think this is a really interesting time for us because gold is a monetary metal. Look, we didn't make it as a critical mineral on the review by the US government because we're a monetary


metal. Silver, copper, all made it. Gold didn't. But at this point, we're looking at the monetary nature of what we do and how we play a role in the economies on a global scale. >> And I think the maybe the flip side of that more wide recognition of gold that we've been talking about is I know you've talked to us in the past about concerns about the dollar. And another headline grabber that I've been noticing recently is talk about the debasement trade that seems to be getting more more


wide recognition as well. So I'm wondering if there is anything you would point out there or or on the your outlook for the dollar as we're moving forward into the next year. >> Yeah, I think it it boils down to to uh a number of key factors. One, how the US economy lands itself in terms of um whether it lands soft or hard. I think ultimately what it looks in terms of of the outlook for the dollar. Can can the president engineer what he wants which is job creation, job growth here in the


US? low inflation and and actually um a stronger dollar through the whole process with trade relationships being renegotiated as we speak. So it's a complicated scenario, but it's not inconceivable to see that the dollar could remain strong. But even in that set of circumstances, it's not the only driving factor that's going to actually impact the gold market. You have to look around the globe at some of the other areas where you have large consumption of gold. So, you know, we've had a a


strong dollar in a gold market that performed well uh over the course of 24 into 25. And actually, what you basically are seeing is eastern investors driving the flow. Eastern consumers driving the actual demand in gold. So, you have to look at those economies as well. So, I I'm not I'm not worried that the dollar strength or weakness will be the only factor that will impact the gold price. I think it'll be a factor to keep a close watch on. As I previously mentioned, I think the debasement trade is to be debated.


it it's it's it's not necessary to put a label on things. I think at the end of the day, if central banks see an alternative to the dollar in terms of growing their dollar based assets or actually looking at other assets, gold's playing that role there. So, I think at this stage, what you see are the dollar dollar-based assets and gold paying a key component of reserve portfolios and I think that that's actually probably the most important point to note. Gold's playing an additional role in the


reserve portfolio context. Yeah, I think that's uh a really key point to note. And as we're getting toward the end here, we're also coming to the end of 2025. We're looking forward to 2026. And I thought maybe this can be a bit of a fun question. If you look back at 2025, how would you sum up the year for gold and what are you expecting to to see in 2026 if you if you look at it in a little bit of a a concise way? So I think if I were to look back at 2025, busy but very good. I think the


performance of gold speaks volumes about the global perspective on risk and and uncertainty. And I I keep saying those terms over and over again. I hope they they sink in with your investor base and your listener base because that's that's an important element thinking about what the risk and uncertainty we've had to face over the course of 2025 and will that be easier or harder to assess into 2026. My sense is that we're going to continue to see these challenges in 2026. We're


going to continue to see these unknowns surface as problems or or just risk in markets. And I think right now if you look at consensus views on the price of gold investors, central banks and and look, jewelry is holding water. It's not a problem in terms of the demand profile that there's going to be a continued interest in these levels of consumption. So I think that that's what I'd look out at. Risk and uncertainty is what we've had to deal with over 2025 and it looks likely into 2026.


>> Yeah, I would say 100% that looks like it's it's going to continue into the next year. And and just a final thought, I know that you don't do price predictions, but I know [snorts] just given the price activity that we've seen recently, there are people who are wondering and thinking, all right, well, did I did I miss the boat on gold? So, as we are wrapping up, any final thoughts you would share on that note? >> I think everyone should look at the price of gold. They should look at the


gold allocation component and what it could mean to their portfolio. And actually what you're going to see are are volatilities a little bit higher in the gold market between now and the next catalyst for the gold move. I think ultimately understand what role it can play in your portfolio and actually you can test the gold market up or down 5 10 15% see how it performs and also look at shocking the other risk assets you have in your portfolio. So have you missed the boat? Absolutely not. You just need


to pick your entry point be smart about it. But before you do that, make sure you understand what it could mean for your portfolio in terms of an allocation. And I think that that's what I'd encourage people to keep doing even at these prices. And again, market consensus tells us, you know, for 2026, over the course of the year, you're looking at a 4,000 to a the 5,300 range. That's actually in line with where we are now at 4,000. So if you're flat for the year on the worst case scenario,


that's a reasonably good outcome in terms of holding water in a portfolio. Well, I think those are our perfect words to end on. So, thank you so much for coming on as always. Great to have you. >> Thanks for having me, Charlotte. >> Of course. And once again, I'm Charlotte Mloud with investingnews.com and this is Joe Capony with the World Gold Council. Thank you for watching. [music] If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love


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