Look beyond the selloff, gold prices should be valued against global debt, not the dollar - abrdn’s Minter

abrdn’s Robert Minter argues the recent gold selloff and USD strength driven by heightened Iran-related geopolitical risk shouldn’t change the core bull thesis: investors should value gold versus global debt/central bank balance-sheet expansion rather than the USD. He says the historical gold–USD/real-rate relationship “stopped driving” gold in 2022, and that structural currency debasement and official-sector buying are the dominant long-run supports. Kitco frames spot as “struggling to maintain support near $5,000/oz.” Minter ties gold’s long-term move to balance-sheet growth, saying major central bank balance sheets are up ~1,000% since 1999 and “big surprise—so is gold.” He adds that advisors are increasingly hearing client concerns about purchasing-power erosion, supporting commodity allocations, “especially gold.” On debt dynamics, he argues meaningful downside pressure would likely require significant sovereign debt reduction across major fiat-currency nations—something he sees as politically/economically unlikely. On positioning/flow support, he highlights continued central bank demand: 2025 purchases slowed to 863t (vs. >1,000t in each of the prior three years), but higher prices meant central banks spent materially more. He cites an average gold price ~44% higher YoY, implying ~25% more capital outlay to sustain buying goals—suggesting demand has not “diminished” in financial terms. Technically, Minter maintains the market remains in an objective bull trend, noting gold is still well above its 50-day moving average. abrdn’s 12-month forecast remains ~$5,500/oz (described as conservative), with near-term volatility risk from crisis-driven USD liquidity bids, but medium-term support from ongoing EM central bank reserve diversification and structurally high debt levels.