Name: Gold as a safe haven asset
Uploaded: 2025-12-23T15:46:15.811Z
Duration: 5 min 30 s
Description: David Neuhauser, CIO at Livermore Partners, predicts gold has more room to run even after hitting yet another record high. He touts that investors will continue to have a preference for gold as they demand higher yields from their governments.

David Neuhauser, CIO at Livermore Partners, predicts gold has more room to run even after hitting yet another record high. He touts that investors will continue to have a preference for gold as they demand higher yields from their governments.

Gold has experienced significant price increases in recent years, reaching a new record high and rising over 70% this year. The surge is attributed to increased global debt, higher fiscal spending, and persistent inflation, which have made gold an attractive option for investors seeking protection against currency debasement.

Despite not offering any yield, gold has continued to rise alongside risk assets such as equities, reflecting concerns over fiscal irresponsibility and government debt. Analysts project that gold could reach $5,000 to $6,000 per ounce in the coming years, with silver and other metals also benefiting from similar trends.

Gold as a safe haven asset

I think there's a number of things that have been affecting gold for the past number of years. So, you know, obviously this has been a great investment in trade for Livermore and we've kind of looked at this call for the past several years. So it's gone really well. I think the key dynamic continues to be it's the key debasement trade globally with increased debt, increased fiscal spending by governments, by increased inflation. You know, you've seen this dynamic where gold has essentially exploded in the past number of years. And of course, this year it's up over 70% and at a new fresh record high. So it's been a very, very dynamic trade and I still think it has legs to go. What's curious to me is two things. Number one, gold has been moving higher in tandem with risk assets like equities as well. So a really interesting double play unfolding there for investors. And at the same time as well, gold, of course, does not pay any interest. And in a world where we see rates, you know, still basically positive in real terms. Why do you think investors are still so happy to hold on to gold, even though it doesn't really provide any yield? Yeah, so I look, I think it's a great question, and I think that's the difference between gold today and gold like rally in the past, you know, say, say decade or so, where I think today you're seeing this disconnect, right? You're seeing a massive disconnect and dispersion between the underlying price of gold. And when you look at things like, you know, interest rates, and I think that is key is that typically you would see rates in the long run start to rise. And you would also see gold sell off, because as you described, when you see, you know, rates increase, it doesn't pay anything gold, so it would sell off. In this case, you're actually seeing it go, you know, hand in hand, and that shows you that it's the fiscal, you know, the potential fiscal irresponsibility is what's driving the market is that they're, you know, investors are requiring governments to pay more for their money in terms of credit. And thus, they don't believe that, that over time that they think they're going to get paid in accordance with those terms. So the view is that gold obviously doesn't pay any interest. But at the same time, it doesn't get debased away by governments inflating their currency. And that's what's happening today. So so that's the key underlying dynamic is what's happening in gold today is the whole debasement and fiat issue. So do you think gold is still a safe haven, then? Because at the same time, against the backdrop of that debasement trade that you're speaking about, David, we've also seen the geopolitical risks rising here. We have fresh US pressure on Venezuela, attacks linked to the Russia-Ukraine war continuing to unfold as well. How much of this recent rally that we've seen is actually fear driven, so to speak, that traditional kind of safety trade also in play? You know, I think there's some of that, but I don't think it's as much as you believe, because I don't think overwhelmingly, you know, the issue with Venezuela is sort of like a major political dynamic. Russia, of course, is, but I think, you know, it looks like that's been simmering for some time. I think overall, it's, you know, anytime you're in a bull market, you know, it needs to sort of feed the bulls, they say. And I think in this case, you know, the underlying fundamentals for higher gold prices has been set, like I said, in the past number of years. So what you're seeing now, though, is sort of this information flow when there has been more fear, more risk to, you know, both fiscal, on the fiscal side as well as the geopolitical side. And that's essentially driving gold to fresh highs, and that's what you're seeing today. So let's go to the $5,500 or maybe even the $4,500 or maybe even the $5,000 question here. What is the next higher high for gold, David, if you think this upside rally stays intact? Where is the price going? So our hedge fund, yeah, I mean, we've made a call and we think gold could go to $6,000. We don't think it's going to happen necessarily too fast, but we think, you know, $5,000 gold, you know, these numbers tend to move in big round numbers, as you know, just like with oil in the past. And I would say that gold, you know, $5,000 looks like a mark that could obviously hit fairly soon in 2026 as New Year comes to light. But I think when you look at a little bit longer term, it feels like the base is starting to become higher, where we're going to end up in a band of about $4,000 to $6,000 an ounce of gold. Silver, of course, has been just on fire as well. So you're seeing sort of that dynamic take hold, and there's been huge run up in silver. It's been catching up, of course. The gold's actually outperformed gold this year. But I think all metals, for the most part, are rising because they have been under-owned. And there's, like I said, there's a further risk that, you know, global debt around the world is just exploding. And therefore, you know, you need to own assets, which will, you know, defend against that debasement. And again, that's what you're seeing now. It's loud and clear, but it could continue for some time to come, for sure.

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