BlackRock analyst forecasts gold rise amid rising government debt

Evy Hambro, BlackRock’s global head of thematic and sector investing, expects gold prices to continue appreciating as government debt, budget deficits, and currency depreciation worsen. Hambro views gold as essential portfolio insurance, noting that current allocations remain significantly lower than the 10% often recommended.

According to Hambro, government bond markets are signaling unhealthy public finances, which may lead central banks to become less strict regarding inflation targets in an effort to inflate away debt. While near-term volatility is expected due to shifting interest rate expectations, the long-term trend for gold remains upward.

Regarding the mining sector, Hambro suggests that gold miners offer approximately three times leverage to the gold price, as mining costs are currently rising more slowly than the price of the metal. She also criticized major miners, including Barrick Gold, Newmont, AngloGold Ashanti, and Gold Fields, over approximately $12 billion in share buybacks, suggesting a need for more disciplined capital returns or reinvestment into mine development.