Gold is hovering near record highs as investors weigh the impact of global debt levels, inflation risks and shifting central bank policies. With interest rate cuts under way and currencies under pressure, the case for gold as a long-term store of value remains intact heading into 2026.
BNN Bloomberg spoke with Tom Winmill, portfolio manager at Midas Funds, about the forces driving gold prices, why central bank demand matters more than short-term headlines, and how investors should think about gaining exposure.
Key Takeaways
- Gold’s recent strength is being supported by heavy global debt loads and policies that favour inflation over fiscal restraint.
- Central bank buying from creditor nations remains a key long-term driver, even if purchases pause temporarily.
- Short-term geopolitical shocks can move gold prices, but long-term monetary trends are seen as more influential.
- Physical gold ownership carries high costs and wide trading spreads that can weigh on investor returns.
- Exposure to high-quality gold mining companies offers leverage to rising gold prices with the potential for compounded equity returns.
Read the full transcript below:
ANDREW: Gold is trading near record highs again today, with spot gold sitting about US$40 below the record set a few weeks ago. Spot gold reached a record high on Oct. 20 at roughly US$4,356 an ounce and is now trading above US$4,300.Let’s get more on the outlook from Tom Winmill, portfolio manager at Midas Funds. Tom, thanks very much for joining us.
TOM: Hey, Andrew. It’s a pleasure, as always.
ANDREW: You think one of the biggest factors pushing gold higher is the state of government balance sheets around the world.
TOM: Oh, absolutely. There’s a lot of focus on geopolitical events, and yes, those can push the gold price around in the short term, but that can reverse just as suddenly as it starts.Jewelry manufacturers also tend to step back when prices rise. They prefer stability before coming back into the market.The biggest factor for us at Midas is central bank buying from creditor nations. We think that will start to pick up now that the United States has cut rates, which typically results in a weaker dollar as yields on financial instruments become less attractive. That environment usually encourages increased gold buying, and we think that’s what we’re starting to see.
ANDREW: You’re also in the camp that believes governments with large debt loads actually need inflation to reduce the burden.
TOM: That’s right. Governments want to pay enormous debts — more than US$35 trillion in public debt in the U.S. — with cheaper dollars. The way to do that is to keep creating more of them.The amount of dollars in circulation is up nearly a third since the depths of the COVID crisis. When you have that many dollars sloshing around, they lose value.We’re now seeing rate cuts even though inflation hasn’t really come down. We view that as a desperate move to keep interest payments from becoming an even larger part of deficit spending.Debtor countries inflate their currencies to ease the burden, while creditor countries respond by reallocating reserves into gold and other precious metals to preserve value. We see that as a long-term trend.
ANDREW: You’re not a fan of buying physical gold bars as an investment, even though retailers like Costco have been selling them.
TOM: Costco is a very savvy retailer, so in that trade you probably want to be the seller.Retail investors often underestimate trading spreads in physical gold, which can be around 10 per cent. That means you need roughly an 11 per cent gain just to break even.We think it’s far better for most investors to own shares of well-managed gold mining companies. They have gold in the ground, gold in production and long mine lives.Buying bullion generates a negative return on equity once you factor in insurance, storage, shipping and transaction costs, even before spreads.
ANDREW: One of your fund’s largest holdings is Agnico Eagle. As of Oct. 31, it made up about 13 per cent of the portfolio.
TOM: It’s been a Canadian darling for decades and has paid dividends for more than 40 years. I think it has one of the best management teams in the industry.They focus on per-share returns, which is what shareholders care about, rather than simply growing the size of the company through dilution. They buy back shares, pay dividends and remain disciplined on costs.They also operate in politically stable jurisdictions and maintain strong relationships with First Nations communities. Even in a strong gold market, their emphasis on cost control really sets them apart.
ANDREW: I noticed some of the largest global producers aren’t among your top holdings.
TOM: Some of those companies have taken on significant political risk. After major mergers, they expanded into jurisdictions where governments can step in just as projects start to generate returns.A gold mine can take 15 years to earn back its capital. In some regions, companies never fully realize that return.We prefer companies operating in stable jurisdictions like Canada, with clear mining regulations and lower political risk. That’s why we focus on high-quality operators rather than simply owning the largest names.
ANDREW: Tom Winmill, portfolio manager at Midas Funds. Thanks very much.
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This BNN Bloomberg summary and transcript of the Dec. 12, 2025 interview with Tom Winmill are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
