Investment expert Charlie Morris highlights how US debt growth and central bank demand are fostering a bullish environment for gold, with potential for prices to exceed key technical levels amid a changing global financial landscape.
Gold may still have room to rise as the United States steps up measures that could keep borrowing costs in check, according to Charlie Morris, investment director and founder of ByteTree. In the latest Atlas Pulse Gold report, Morris said US Treasury Secretary Scott Bessent’s decision to double long-dated Treasury purchases had echoes of quantitative easing, the central bank tool used to push down borrowing costs and support financial markets.
Morris argued that the move is aimed at lowering long-term yields and, in turn, reducing the government’s financing burden. That matters for gold because lower real returns on bonds often improve the appeal of non-yielding assets such as bullion. He said the trend in gold was improving and suggested prices could soon move back above the 200-day moving average, a closely watched technical level.
His bullish case rests heavily on the scale and pace of US debt growth. Data he cited put total US public debt at about $40,000 billion. Morris said the average annual rise in debt has accelerated from about 3.7% in the 1990s to 7.8% before the pandemic and roughly 8.6% since then, outpacing nominal GDP growth. That imbalance, he warned, leaves policymakers with fewer options as refinancing needs build, including about $3,000 billion of debt expected to come due in 2027 and 2028.
ByteTree’s calculations suggest the global value of gold is now about $31,000 billion, equal to roughly 77% of US debt and around 37% of the value of the US stock market. Morris said that relationship could still widen if the world enters a period of greater economic stress or persistent inflation, as it did in the 1970s or during the global financial crisis. He also pointed to limited supply, noting that gold production rises only about 2% a year, which he said helps force price adjustment when demand increases.
Morris linked the argument to a broader shift in official-sector buying. He said central banks are being pushed towards gold as they look for highly liquid reserves with long-term value, especially if they trim Treasury holdings. Gold demand from central banks has also been recovering after Russia and Turkey recorded net selling in the first quarter, while China’s large trade surplus may continue to channel capital into bullion. In a world of more unpredictable economic relations, Morris said, many institutions are treating gold as a necessary holding rather than a discretionary one.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
