BlackRock investment chief Evy Hambro expects government borrowing, inflation and geopolitical risk to support gold, while condemning miners’ $12bn buyback spree as reckless.
Evy Hambro, BlackRock’s global head of thematic and sector investing, is betting that gold’s climb is not finished. In an interview with MoneyWeek, he said the metal should continue to benefit as governments borrow more, run larger deficits and weaken their currencies through inflation. Hambro argued that these pressures have created a backdrop in which investors are likely to keep seeking gold as a store of value and a form of portfolio insurance.
His case rests partly on what he sees in bond markets. Hambro told MoneyWeek that rising government borrowing costs are a warning sign about public finances, with investors increasingly unwilling to fund states that are spending heavily without a clear plan to stabilise debt. He said the likely outcome is higher yields on long-dated bonds as lenders demand more compensation for that risk. He also suggested that, in practice, governments may find inflation easier than austerity as a way to reduce the burden of debt, which could leave central banks under less pressure to stick rigidly to their inflation goals.
Hambro also sees the metal itself as well supported by market history. He said the current environment of mild stagflation, a softer dollar and geopolitical strain has reinforced the appeal of real assets such as commodities, infrastructure and gold. He noted that when he started working in the sector around three decades ago, copper traded at about 60 cents a pound and gold near $400 an ounce, compared with roughly $6 and $4,000 now. Wealth managers, he added, once held meaningful gold positions, but those allocations largely faded in the early 2000s and have only returned in much smaller sizes than the roughly 10% weighting he believes some investors should consider.
That outlook extends to mining shares, which Hambro said are once again offering leverage to the gold price. According to his remarks, mining costs are rising more slowly than bullion, allowing margins to widen and restoring a pattern in which gold equities can move about three times as much as the metal itself. He said investors who want direct exposure may prefer physically backed exchange-traded funds, but miners can provide extra upside through dividends and growth. At the same time, he warned that near-term volatility could continue as traders adjust to changing expectations for interest rates and monetary policy.
Hambro was far more critical of how some of the biggest gold miners have returned cash to shareholders. Speaking at the FT Mining Summit, he described recent buyback programmes as reckless and said they appeared to have been approved without the same level of scrutiny normally applied to major mine investments. Reuters reported that Barrick Mining, Newmont, AngloGold Ashanti and Gold Fields have together announced about $12 billion of buybacks, and that BlackRock has sizeable holdings in three of those groups. Hambro argued that companies should preserve flexibility to repurchase shares when valuations are depressed rather than committing large sums near market peaks, and that cash might be better spent on new production if miners want to support future supply.
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