(Kitco News) - Speculative interest continues to be the driving force in the gold market as prices make a move back to last month’s all-time highs near $4,600 an ounce; however, one portfolio manager said that gold’s appeal as an alternative to the U.S. dollar will be the biggest factor for long-term higher prices.
In an interview with Kitco News, David Miller, Chief Investment Officer at Catalyst Funds, said that the metal’s long-term trajectory remains firmly higher, driven not by speculative excess but by deep structural shifts in the global monetary system.
“I’m pretty confident over the next year and several years, gold will continue to go up—and fairly rapidly,” Miller said.
While he acknowledges that gold can appear overvalued when judged purely on nominal price levels, he argues that such metrics miss the point. Gold’s role today is monetary, not functional.
At the core of Miller’s thesis is the erosion of the U.S. dollar’s status as the unquestioned global reserve currency. That shift, he argues, accelerated sharply after 2022, when the U.S. and its allies weaponized the global financial system through sanctions.
“If you’re a central banker outside the U.S., why would you want your reserves in dollars when we’ve shown we’re willing to take those dollars away if you do something we don’t like?” he said.
Trade policy has compounded the problem. Miller points to the rise of aggressive tariffs as another reason foreign governments are reassessing their exposure to U.S. assets. Add to that chronic deficit spending and a ballooning national debt, and the appeal of the dollar continues to erode.
“The U.S. is deliberately debasing its currency by running very significant deficits,” he said. “There’s no indication the government intends to pay that debt down.”
The result is a powerful tailwind for gold, particularly from central banks. While official sector buying may fluctuate year to year, Miller believes the odds of central banks becoming net sellers are extremely low.
“They don’t care about the price,” he said. “They don’t want dollars as their primary reserve asset—regardless of where gold is trading.”
Miller added that investors should take a page from central banks as they look to position their portfolios to protect their wealth in 2026.
Miller estimates that U.S. deficit spending alone implies an annual loss of roughly 5% in the dollar’s purchasing power. When combined with ongoing official-sector demand and constrained supply, he believes gold can still deliver annual gains in the 10% to 20% range, even if the pace moderates from recent extremes.
Bonds, Inflation, and Gold’s Role
Miller is particularly critical of bonds in an environment where inflation exceeds nominal yields. In his view, investors holding fixed income under those conditions are locking in negative real returns—often while paying full income tax on nominal interest.
“That makes no sense unless you’re okay with permanently losing purchasing power,” he said.
This thinking was a key motivation behind Catalyst’s gold-linked investment strategies, which seek to pair income generation with inflation protection. More broadly, Miller believes gold is increasingly replacing bonds as the defensive anchor in portfolios.
Rather than thinking in terms of fixed allocations, he prefers a different framework altogether: denominating wealth in gold.
“I’d rather denominate my portfolio in gold,” he said, arguing that doing so reflects true purchasing power in a way traditional asset valuations cannot during periods of sustained inflation.
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