You're listening to Strictly Business Podcast with Lindsay Williams. At the beginning of 2024, the gold price was hovering around US$2,000 per ounce. At the end of that year, it had risen to around US$2,600. And then in 2025, just last year, it started to accelerate a bit and the graph started to steepen. And then recently, in the month of January 2026, people got a little bit silly, I think. The gold price went as high intraday to $5,625 an ounce, to be precise.
And then within 48 hours, it had fallen precipitously to below $4,500. Currently, as we pre-record this podcast, it's around about $5,050. So it's all over the place. Here to make sense of it is George Cheveley, portfolio manager at 91 in London. It got a bit silly, didn't it, George?
Yeah, there was a lot of buying in the beginning of... this year, as people and I think a bit of FOMO came into play, we'd seen the price start to move and everybody came in and decided they needed to own gold this year. And certainly things moved very, very rapidly. And it was exacerbated by the fact that everybody felt that, you know, Trump's pick for the Fed chair was various names were flying around.
It was hugely uncertain and everybody thought, you know, this was very bad news for the dollar. because the Fed was going to lose its independence. So that sort of played into the fears around gold. And then you throw in the fact that Iran, you know, the situation was getting more tense. We obviously had Venezuela at the beginning of the year, so geopolitics was super uncertain. So it was a cocktail of events that really drove that price very high.
We've still got the Iran situation, and there was a drone flying over one of the aircraft carriers, I think it was, and it was shot down, and that alerted. people and gold started to twitch a little bit. So that's still there. The debasement of the dollar, though, which was another reason for the gold rally, in my opinion, hasn't really materialized. And the Fed chair nominee doesn't seem to be as radical as some of the other potential choices. No. And last Friday was a very good reminder.
You know, if you talk to anybody who's looked at gold for any time, they would say Fed. policy has always been a key driver of gold. And for Fed policy, you know, Fed generally. And clearly, the worries that the Fed was losing its power and losing its control and Trump was taking control, was worrying people about interest rates in the States, they thought they'd fall too fast. And then bond rates were all over the place. And people were worried about the dollar.
And actually, when the nominee was announced, which was Walsh, who is seen as certainly more sensible than some of the other names being thrown around. You know, we were reminded that actually the Fed still matters when it comes to gold and the fact the Fed nominee looked more sensible and Fed policy might not be so radical going forward. We saw the froth come out of the gold market very quickly. Froth it was as well.
So where does that, and actually I'll come to where does that leave us towards the end. The other factor that really contributed to the extraordinary volatility in the gold market was the extraordinary volatility in the silver market. All sorts of stories coming out now that the silver trade was subject to deleveraging and there was a lot of Chinese influence.
And in fact, I saw something flash across my screen just about half an hour before we started, George, about a Chinese trading company that purportedly made... 500 billion US dollars out of the silver market. So silver, a factor, speculatively? It certainly was very noticeable in the sell-off. And it's obviously, I've always seen silver as leveraged gold, and it's been acting like that, particularly in the last few months.
It is obviously more attractive to a lot of retail people because you can buy more with less money, essentially. So you can actually buy a significant amount of silver. And therefore, it's always been a favorite of retail investors. But as a result, there's always been more leveraged. And clearly, you know, with gold moving as it did, silver moved. I have to say, if you look at last week, everything was moving. We saw all metals moving, platinum, copper, aluminium.
We even had oil moving up quite significantly. Some people said that was Iran, but it was almost a general anti-dollar trade. I think we've also got to remember this is a bit of a rush for hard assets, which has occurred at the same time. So people are getting more worried about the AI tech trade, and you're seeing a rotation more generally into hard assets and resource equities in many markets. Given what you just said over the last few minutes, there's still a case for gold, isn't there?
Where do you see it going from here? And how would you play it? In other words, what vehicles would you use to take advantage of what you see as the future of gold? We're clearly in a very volatile period. When you've got a trading range of over $1,000 in the last week, you've got to be very careful. And clearly, we need to see things settle down. I have to say, if I look at all the drivers for gold, you know, when we talk fundamentals, we're really talking drivers.
If you say, you know, interest rates like to fall or rise in the States, they're likely to fall. That's positive gold. Does that mean the US dollar weakens or strengthen? It probably on margin means it weakens. That's positive for gold. Are geopolitics getting any less uncertain or stable? They look like they're going the opposite way. We still have Iran, we still got, you know, US and China essentially competing more ferociously with each other. That just creates a very unstable backdrop.
So all those drive, as you would say, and economic uncertainty remains, you know, very high. A lot of question marks about the US market, US debt levels, fiscal policy, what's going to happen in the midterms. There's nothing, you know, pointing you to say, oh, I can see why things are going to settle down and we won't need, you know, people won't look for gold as a safe haven. So all those drivers are in place.
Almost the most worrying thing about gold at the moment is one, it's moved a lot already and it's very hard to come up with a bare argument for gold. And that's always a worrying thing when you're looking at any market. All that said, that means, I mean, my view certainly is gold is likely to hold current ranges, and that's a wide range. But let's just say I think gold can hold above $4,500. And the risk, if I'm wrong, is that it goes higher rather than lower. Where do I look to invest?
And this is, you know, might sound like a repeat. I'm a gold equity fund manager. And so obviously I'm going to say equities, but actually. You know, today, I believe it more than ever, because the equities, whilst they're up three times over the last year, or many of them are, that actually their margins are up four to five times. So we're still looking at equities trading on single digit PEs with good growth numbers.
And what you have to believe, and it is maybe a big ask, but you have to believe gold's going to stay about four and a half, if you believe that. These companies actually, or many companies, not all, but many companies look very, very cheap today. Right. Let's move from gold to copper, the red metal. And that's been quite extraordinary as well. We spoke about it last time and I could almost see or rather hear a twinkle in your eye if that's possible when I mentioned copper.
And it hasn't disappointed, has it? No, it's been one of those very pleasing trades. In last August, we got bullish copper. We felt there was a squeeze coming. The tariff thing obviously was driving copper to be delivered to the US, which continued probably stronger than we believed. But it meant that essentially we've ended up with all the copper inventories in the States and very tight markets elsewhere in the world.
And that's led to this squeeze for a moment where copper prices have been driven higher, as essentially they've had to push prices up to attract metal out of the States or at least stop it going in. I have to say, though, you know, copper is more based on fundamentals. You know, if I look at copper today, you know, demand is pretty lackluster. Now we're coming into Chinese New Year. It's always a difficult time of year to judge what real demand is.
But certainly all the indicators at the moment is it's pretty soggy. People are not willing to pay these high prices. And whilst there is some units moving, there doesn't seem to be a big fundamental drive in the demand side now. Certainly, we probably should wait the end of March and post-Chinese New Year. It might be the Chinese have just stopped ahead of New Year and will be driven to buy, you know, come back into the market in March.
But if that doesn't happen, copper feels definitely overextended. And actually, you know, I invest in copper equities. If I look at copper equities today, unlike gold equities, copper equities have actually kept up with copper prices, if not. ahead of them. So valuations of copper equities, the pure plate copper equities, actually look pretty stretched.
We're talking PEs in the 20s, even 30s in some cases, which the assumption therefore is that copper prices are going to be here or higher long term, which I think is too bold an assumption. So does that mean you've adjusted your positioning at 91? Yeah, we've essentially taken some profit on the copper equities we've held. And we've certainly put a bit more back into gold over the last month. The other thing we've done, though, in the mining space is added more in the large diversifieds.
And that's been particularly driven by the sort of speculation around the Rio-Glencore merger, which we're waiting to see hopefully any day, whether that happens or not. Our view is it happens. Our view is it's positive for Rio and Glencore. George, thanks so much for your time and your analysis. George Cheveley is a portfolio manager at 91 in London.
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