The Central Bank Gold Rush: What It Means for You | Chris Mancini

James Connor 0:05
Hi and welcome to Wealthion, I’m James Connor. And before I introduce you to our guest, just a quick reminder to subscribe to our channel, Wealthion.com. We have some amazing interviews coming up in the coming weeks all of which will help you protect and grow your wealth during these uncertain times. And the best way to be made aware of what’s happening on Wealthion is to subscribe to the channel and also hit that notification button to be kept up to date on future events. And now I want to introduce you to our guests. Chris Manzini. Chris is an associate portfolio manager of the Gabelli gold fund and abilities of bottoms up value fund based in New York, and manages just over $29 billion in assets. Chris is focused on the gold sector, and we’re going to get his views on whether or not now’s a good time to invest in gold and gold equities. Chris, thank you very much for joining us today. How are things in New York? Jimmy?

Chris Mancini 0:56
They are good. They are good. Not too cold. 28 degrees this morning, but Sunny. So like very doable. And, and it’s a nice respite after super wet and cloudy and gray. Like, like week I think we had last week, which is miserable. So it’s things are good in New York. Thanks.

James Connor 1:20
Yes, it’s almost like Spring is in the air. Things are definitely looking up. Yes, I

Chris Mancini 1:25
hope so. feels that way feels, hopefully for the gold price, too. But I will say,

James Connor 1:31
Chris, before we do the deep dive on gold, I want to get your thoughts on the broader economy. And if there’s anything that’s concerning you right now, or if there’s anything that’s keeping you up at night?

Chris Mancini 1:41
Yeah, I mean, I think that the big picture is that the Fed has done so much. There’s been so much intervention by the Federal Reserve over the past few years in terms of the enormous amount of quantitative easing that they did in all different types of asset classes. And then the very swift and rapid tightening that they’ve undertaken in in the past, like in the past year or so as they’ve raised rates, and then they’ve also drained some liquidity from the system in terms of the terms like quantitative easing. So, I mean, this has been a very rapid and very significant tightening of monetary policy. And it seems like everything’s okay. But we are seeing some, like cracks beneath the surface. We’re seeing kind of credit card delinquencies going up. Auto Loan delinquencies going up? The consumer saving rate going up? So it’s, it’s, it seems like everything’s okay. And there is this kind of Goldilocks narrative going on right now. But it just it just, you know, it seems it seems unlikely to me that, that we will have gotten out of this type of like enormous monetary experiment with with, you know, very little material repercussions to the to the economy.

James Connor 3:01
Very interesting viewpoints. Chris, thank you for that. One of the things we try to do at Wealthy on is provide investors with insights on how to protect and grow their wealth. And you and your team believe Gold and Gold equities can do that. And I want to begin our discussion right here. Why should investors own gold and gold equities? What are the benefits of doing so? Well,

Chris Mancini 3:23
the reason to own gold is as a hedge against the monetary authorities not getting everything right, in terms of this Goldilocks scenario, not coming to fruition. And so, now, the thing is that so like, what does that mean? What that means is that, if the Fed does undertake more quantitative easing, and essentially printing money, then it could cause an inflation like was caused during the COVID or geo or as a result of the COVID or ordeal. So we have seen prices increase prices broadly in the United States, around 23% higher than they were at the beginning of the COVID ordeal. So again, like like, it seems like we’re in this scenario where the quantitative easing is here to stay. money printing is here to stay and and like inflation might be here to stay. So currency debasement might be here to stay, meaning that as currency loses its value, hard assets like gold, like gold will maintain their value in terms of that of that currency. And the other thing to keep in mind is that is that these situations could happen quickly. So we saw with the failure of first republic and Silicon Valley Bank, and then the other banks in New York, the Sterling bank in New York that happened very quickly. The Fed set up facilities in which it it injected liquidity into this Just a move essentially printing money, and gold went up when that happened. I think that if we were to see a weakening in the economy now, so so like, after we saw very strong nonfarm payroll number, if we were to start seeing weakness in those numbers, I think that there would be a view or narrative in the market that the Fed would start QE again. And so I think gold would run. So it makes sense for everybody to have a little bit of gold in their portfolio, again, as a hedge against, like, a Goldilocks scenario not transpired.

James Connor 5:32
Yes, Chris, you mentioned the regional banking crisis. And I have to be honest, honest, I almost forgot about that. That was almost a year ago, but it was amazing how the whole thing was contained relatively quickly by the Fed. And it did not spread the way a lot of people thought it would.

Chris Mancini 5:49
Yeah, yeah, exactly. I think that they did it through printing money, just like they were able to really contain the whole COVID or deal where the whole world economy was shut down. In this this circumstance, the United States economy was shut down by printing money and buying assets. Now, again, that resulted in in the prices of goods being 23%, higher now than they were then. And, you know, if other banks do start to fail in the United States, because of either highest higher rates, or or delinquencies or commercial real estate, you know, what will be the response to the Fed, it probably will print more money. So again, like, they do contain these things, but but there is an eventual cost. And, and, you know, and, and to the degree that, that we stay in this cycle of, you know, kind of things are okay, then a crisis or a recession and quantitative easing is the result to the extent that we stay in this type of cycle, inflation will likely be here to stay, and gold will continue to try to hold its value.

James Connor 7:02
So along that same vein, central banks have been large buyers in recent years have gold in in last year, in the last year, they purchased, I believe, over 1200 tons, and there was just over a third 3200 tons produced, so relatively large amount, but maybe you can tell us why central banks have been so aggressive in acquiring gold. Yeah,

Chris Mancini 7:23
central banks are buying gold, because I mean, it it highlights again, the value of gold in a in a kind of similar kind of ancillary way to the to how I was describing it, in that gold is an asset, which is, which is nobody’s liability, and can’t be replicated, right. So, so we see with, with the inflation that took place in the United States, and also around the world, like Canada, too. It was because of all of the money that was printed. And as the money is printed, it causes the the price of things to go up in those money terms, right. And so, so as the price of those other assets go up for those just goods go up in money terms. Gold also goes up in value. But but we saw something a lot more concrete relative to the value of gold, compared to paper currency in what happened in Russia, after Russia invaded Ukraine. So after Russia invaded Ukraine, the United States and other European countries essentially confiscated Russia’s US Dollar and Euro denominated reserves. So Russia held around $500 billion of reserves. And a portion of that was in US Treasuries a portion that was in Euro denominated bonds. And when, after Russia invaded Ukraine, the United States and Europe said, we are not going to pay you back, essentially. So So Russia, loaned us and European countries money in terms of owning those bonds. And we said, Look, we’re not going to pay you back. So So So Russia thought that it had hard currency reserves. And it turned out that they did it. And, and gold, obviously, they they also held and still hold lots of gold, that gold obviously is involved in Moscow, wherever it is in Russia, and that can’t be taken away, can’t be confiscated. They don’t have to worry that someone’s going to pay them back. Lots of countries around the world are realizing what happened with Russia. And so China, for example, owns around a trillion dollars of US Treasuries, and they’re essentially lending us a trillion dollars. I think that they saw what happened with Russia and they’re saying hey, you know, wait a second, you know, is the US gonna pay us back? And and so they are diversifying they’ve been they were the biggest buyer of have gold last year amongst global central banks. So, so I think they’re going to continue to buy, I think that other countries are seeing that and it becomes self fulfilling, as gold becomes more of the go to, you know, store value hard currency asset for central banks, it can be, it can it can be kind of a self perpetuating cycle. Well,

James Connor 10:23
that’s a very interesting point. And I’d be curious to know, if Russian even other countries were also buying Bitcoin for the same reasons. Yeah,

Chris Mancini 10:32
exactly. I mean, and that’s the point, the answer is no, I mean, it or at least not not, as far as we know. And I highly doubt that they were, you know, the, the thing is that Russia has gold reserves in the ground. China has gold reserves in the ground, right. So they can actually, they can mined gold and add to their reserve base add to their currency reserve base, the United States has the biggest reserve of gold in Fort Knox and the Federal Reserve in New York, but we also have actually very big gold reserves in the ground and Nevada. And, you know, various other places in the US so, so no, I mean, like, they are not going to buy Bitcoin as a store of hard value, they own gold, and they’ll they own gold in the ground, they’ll continue to own gold. And that’s a meaningful a meaningful difference between Bitcoin and gold.

James Connor 11:34
So central banks have been buying the physical gold. Now let’s talk about what’s happening with ETFs, both the GLD and also gold equity ETFs. What are you seeing there? What are the flows like? Yeah,

Chris Mancini 11:47
so in the gold backed ETFs, like GLD, and there’s another one called iau, and other ones, even around the world that are similar. So what they do is they go out, so if you own one share of GLD, it’s equal to a little bit less than a 10th of an ounce of gold. And it’s interesting because it is worth less than a 10th of an ounce because it started out at a 10th of an ounce. But the GLD takes a fee, out of your share out of your outs out of your 10th of an ounce every year. And that’s why right now it’s down to like something like point nine something ounces in one share of GLD. But anyway, but but but the point is that you if you buy GLD, it’s 10 financed. And what we’ve seen is that there’s been a very big decline in the number of ounces and gold backed ETFs. And that’s obviously because investors and speculators and whomever market participants are selling the gold backed ETFs. And so since it’s interesting, like, since the the the end of 2020, actually, when the vaccine was released, and there was a view that this COVID thing was going to be resolved. We’ve had around 625 million ounces, come out of gold backed ETFs. And they continue to come out this year. There have been I think it’s like 10 million ounces so far, just this year, I think have come out of the gold backed ETS, so So market participants in the US and other parts of the world are saying that they don’t need gold. And that’s in stark contrast to what’s happening amongst central banks.

James Connor 13:34
Interesting points, Chris. So Gold is trading around $2,000 announced and it was up small in 2023, I believe somewhere between five to 10%. But when you look at the gold equities, they’re not really betting benefiting from this move at all, like most were down significantly in 2023. And if we look at new mod, for example, the world’s largest gold producer, peaked at $85. In 2022. Now it’s trading in the low 30s. It’s down 20% year to date, and we’re only two months into the year. And I can say the same thing about a number of other gold producers. The GLD is doing a little bit better. It’s up small and on the year, I believe around between five to 10%. But these equities are not factoring in this higher gold price of $2,000 an ounce. And I want to hear your opinion as to why that is. Well.

Chris Mancini 14:31
I think what’s happening is that for the gold miners what happened was that very specifically, as the price of gold went up, like I was saying because of the money printing and the inflation that took place during the whole COVID ordeal. The cost to mind went up and it went up at a faster rate than broader inflation because It’s much harder, it was much harder to operate a goldmine as it was to operate like an asset management firm, where I work or a brokerage firm or whatever, right, or an advertising agency paavola. Because a gold mine, or any type of mine, you have to actually have individuals there on the ground, obviously, you can’t work from home. And then during the COVID ordeal, there were lots of government restrictions that caused the companies to need to socially distance individuals. Lots of mines are remote, lots of gold mines are remote. And so what that means is that you need to fly people in and out. So that got to be extremely expensive in terms of the shift, you know, the rosters and so that you had so so that you wouldn’t have in terms of social distancing and all that crazy stuff, and quarantine and whatever. And, and, and so it just got to be in and also the other thing was that like, with all of the government stimulus and kind of like the paying people to stay at home and that kind of thing, it became a lot more difficult to entice or incentivize individuals to leave their houses where they’re getting paid by the government to go you know, work in like the far north, like at work in the Yukon or something like that. Right. So so it’s a long way of saying that cost went up very meaningfully in the mining sector, as the price of gold went up, so margins didn’t rise when the price of gold went up, and and that really hurt the gold miners. So I mean, Newmont had a specific example where it it did a deal with new crest is no large Ozzie producer. So they they’ve had these idiosyncratic issues, you know, you mentioned Newmont, they are the biggest, but by and large within the mining sector, the reason that they haven’t had the big run, that the price of gold has had or haven’t kept up with the move in the gold price is because their costs have gone up. Increase.

James Connor 17:02
If you look at some of the large producers like Newmont, Beric, or Agnico, what gold price are these producers factoring in?

Chris Mancini 17:10
I mean, it’s hard to say I mean, like, right now I have a couple I mean, maybe a good way to say it is that like I have Agnico which isn’t going through this like idiosyncratic issue with Newmont with the new crest integration. But let’s just say Agnico, which is a good solidly run company, I’d say the bellwether, I’m in the industry. Now given what’s happening with Newmont. A Nico is trading at around one times its net asset value, based on the current spot gold price of around 2050 in house. So historically, back in good times Agnico was trading at like, say, at least 1.2 times nav, because they’ve proven in the, in the past that they can, like they can increase their net asset value, they can grow their net asset value, so it should trade at a premium to its net asset value, they then they grow their net asset value by finding more gold by making good acquisitions, building mines, that kind of thing. So historically, is traded, say at 1.2 1.25 times, nav, and right now is trading at one time. So you know, theoretically, you could say that it’s trading at a gold price, which is 20 to 25%. lower than the current gold price. You and me that’s like, that’s like one way of saying it. Right? So is that because it should be trading 25% Higher? It’s factoring in a gold price, which is 25%. Lower. So that would mean, I guess, if gold to 2000? Broadly, you know, that would mean it’s what is that? 1500? I guess maybe something like that. 1600, something like that? I don’t know. But yeah, it’s factoring in a lower gold price based on based on historic multiples for the for the staff.

James Connor 18:55
And, Chris, do you think that the large buying that’s going on by the central banks throughout the world that they are artificially keeping the gold price up? And I guess another way to frame that question is that if they were buying with the gold price be significantly lower than where it is right now?

Chris Mancini 19:13
I think so. I think it would I mean, I think that they’ve been a huge boon to the gold price. Yeah, given the given redemptions and sales that we’ve seen from the coal backed ETF. So you know, but But I think, you know, I do like to look at it as a cup half full from a gold investors perspective, in that, like this issue with the confiscation of the gold reserves by the US and the potential rise in geopolitical tensions. I mean, I think that the Chinese, frankly probably are looking at at the US election in November, and see that There’s a relatively high likelihood that Trump’s going to win. He’s been more antagonists, he was more antagonistic towards China than Biden is. So like, it seems unlikely to me that the Chinese are going to stop buying gold now. And the Chinese central bank, and it seems unlikely to me that again, these other central banks that have been buying are going to stop doing that. So, you know, the cup half full is if they keep buying. And they’re, they’re pretty price insensitive, if they keep buying and you know, have that kind of baseload demand, and if the ETS do change, and switch, and start to buy instead of sell or even flattened out, then the gold price should go a lot higher. And that’s the that’s the cup half full, you know, view of the of what’s happening of the dynamic now, in the second.

James Connor 20:56
Chris, you made an interesting point about the US election that’s happening this year. And I read an article recently, which discussed the number of elections that’s being held in 2024. And is referred to as the election supercycle there’s going to be over 83 elections being held throughout the world. And I’m curious to hear your thoughts on what this will mean to the price of gold? Well,

Chris Mancini 21:20
I mean, you know, I think that it will be helpful from that perspective of, of the writ of the geopolitical risks and that kind of thing in terms of central bank buying, like I said, I mean, theoretically, I mean, like, if he comes in and cuts taxes, and and I mean, I think that, by and large, it would be probably a marginal, negative, because he probably would get things like more back in order, you know, relative to the amount of spending that we’ve seen fiscal spending, there probably would be less fiscal spending. So I mean, last time around, when I like the night of Trump’s election, in 2016, I do remember, the price of gold spiked, when we saw that he won, and then, like, just put it was just overnight, and then the next morning, it declined, because the market had the view that, that the Republicans were going to be fiscally conservative and kind of get things back in order. But like, I don’t know. I mean, it seems like so much has happened since then. And I mean, we’ve been seeing now that there is this bipartisan deal seems we’re Congress will Congress passed a bipartisan deal. Now we’re, we’re in a Senate in the Senate has to pass it, but it was overwhelmingly supported by both parties have another tax cut, and $83 billion tax cut. And what does that mean? It’s another $83 billion of borrowing. So and, and again, I mean, Trump, you know, he’s a borrower. That’s That’s what he’s done in his entire, you know, commercial career is borrow, borrow borrow. So like I, you know, I think it’ll really be a neutral from a fiscal monetary perspective. But But I think that from a geopolitical perspective, it’ll be a little bit of a positive.

James Connor 23:18
Chris, you made mentioned earlier that gold producers are trading below their na VI’s and I want to get your opinion on royalty companies, historically, they’re always trading at a premium to their na VI. What are your thoughts on royalties here? And I guess, more specifically, looking at Franco Nevada, because of the colbray Panama situation? Well,

Chris Mancini 23:38
royalties are actually big holding in our fund, and they’re just great. They’re ballast in the portfolio, because so just a royalty company, again, it gets a certain percentage of the revenue from a mine. So it’s, it didn’t exist. So royalty companies didn’t experience this big inflation that I was describing. That that happened for the for the, for the big mining companies, or not just big micros, but for the producing companies. So, so because of that, you know, they did really well when the price of gold went up. And they also benefit on the downside. So in a tough market, like now, like a tough equity market for gold miners, they benefit because they’re a source of capital. What they do is they take, you know, so they’re generating cash flow from the revenue for you know, from the royalty revenue that they get, and they also borrow money, or they, then they they pay a dividend, but they redeploy that capital that they get, and they even borrow money and, you know, lever up their balance sheets to give to production companies or development stage companies as a source of financing so that they can bring a project into production. And so they’ll they’ll give money upfront to a company in exchange for the right to assert And a percentage of the revenue from that specific project in the future. So, so, like, they benefit in the upside and to the downside, and they’ve been great investments for us and for our clients for a very long time. But you know, they get to Franco in a sec, but, but you know, so in a good market, so we have to be cognizant, if the market does start to turn, if we do see a recession, and the price of gold runs, and, and the recession, even causes of mining costs to stabilize and margins to really expand, then we have to start switching out of the royalty companies and into the production companies, because those are going to have a lot more torque to the upside. FICO is a specific scenario where, you know, they they’ve always traded at the highest premium, they’ve been the best they’ve been around for the longest. It’s a big holding in our fund. Their largest royalty is on a mine in Panama, a copper mine. And Franco has the right to all of the gold that this copper mine produces as a byproduct, mine is called colbray. Panama is owned by first quantum, which is a Canadian based, multi asset mining company. So long story, but due to protests and various political considerations that are like totally, in my mind, just wacky things that happened in Panama, the mind was closed. So the government closed the mind. And now it’s not producing. And, you know, there’s a question as to whether or not it will ever reopen. I mean, it’s absurd, frankly, to think that it that it won’t reopen, but there is a distinct possibility that it won’t. And so right now, if if I include colbray, Panama, as an asset is trading Franco’s trading at a very big discount to where it has historically and to its peers. If I take Tilray Panama out, it’s trading in line with where it has historically, which might be you know, a little bit too high, given that, given that, you know, it might start to trade at a discount. If colbray. Panama is closed, and definitely

James Connor 27:21
interesting points, Chris. And I’m sorry, would you say Franco is trading on an F basis?

Chris Mancini 27:27
On a price to NAV? I mean, get so from recollection? Like, if I include colbray, Panama, is trading at say, like 1.4 times nav? And if I take colbray, Panama out, it’s trading at around? No, sorry. So So yeah, sorry. All right. I take colbray Panama out is trading at like, two times nav, which is historically where it’s traded around two times nav, so are like 1.9, something like that times nav, so like, so. So now the market seems to be pricing Kobe Panama out, but the thing is, if Kobe, Panama is taken out, it probably won’t trade at its historical high multiple, because the market is gonna say, Well, these guys got this one wrong. You know, they got the Kobe, Panama, whereas historically traded, it’s such a big at the biggest premium, because they, you know, Franco just gets everything right. And they have historically for the past 20 years. So that’s the deal now that the mind was just closed, I think, like November or something like that of last year. So so I’ve been closed for a couple months. There’s an election in Panama in May. And there’s a and it’s huge, the minus 5% of the GDP of the country. So again, it’s never had any any environmental issues, never any profit, like there were never any leaks or out of its tailings facility, like everything was up to snuff like, it operated well, like, like very well for for three years, I think three or four years. So it’s very strange. What what happened to there. And, you know, we’re hopeful that it reopens. But we’ll say,

James Connor 29:10
yes, one of the things I find fascinating a boat mining as the geopolitical elements, and this is one of those situations where you don’t know what’s really going on behind the scenes. And we don’t know quite often it comes down to money, and I’m sure that’s the case here. What

Chris Mancini 29:25
something’s happening, which again, because it doesn’t make sense and and, you know, we’ve heard that there were issues with like, with like a you again, we don’t own first quantum so what your so but we’ve heard that there are issues with a union maybe like, like first quantum used, like a different union, from like the main union to build and operate the trucking years, something like that, to operate the mind in Panama. So now, this mean trucking union might have been financing protests to an extent to get Let the mind closed. So that maybe first quantum will use this new, you know, this, this, this, this new union this up this first union. And again, as you know, like, look, things are screwy in the US too. But like this is super screwy, frankly, and because this is like, because because the company and investors have put billions of dollars into this mine and even so I mean, we’ve, we, in our holding and owning and investing in Franco Franco invested a billion dollars in this project in order to get the rights to the to the goal. So like, you know, for the for the Panamanian governor, like it just it doesn’t look good for Panama, for this to happen, and I mean, you know, it would just be shocking for, for investors to put more money into the country, given what’s happened here extremely opaque and strange. So hopefully, again, you know, they get it sorted. But yeah, I mean, these are, these are the things again, that we have to really, it makes it very interesting for us, obviously, sir, for, for me as a as a portfolio manager to to try to figure out all these ins and outs and risks of all these various jurisdictions.

James Connor 31:15
Chris, I have to get your opinion on Bitcoin, we can have a discussion on gold without talking about Bitcoin in the SEC recently approved 11 Bitcoin ETFs, including some associated with the largest fund managers in the world fidelity and BlackRock, and I want to get your views on. Maybe this is another reason why gold is not performing the way you would expect it would. Do you think Bitcoin is taking away a lot of capital? From the gold trade?

Chris Mancini 31:44
Yeah. I mean, I mean, I think so. So Bitcoin, I mean, what do I think? I think number one, I mean, sure, it’s, it’s taken away some interest from gold. And, and so it has been a headwind to the gold price. You know, will it continue be to be I’m not sure. I mean, I, I think it’ll be amongst like, like a younger cohort, I think maybe, you know, 40 years old and younger. There might be this aspect of like, you know, Sure, let me have some bitcoin instead of gold. I think so most people are just like, most people in Bitcoin now are in it from a speculative perspective, and haven’t really thought about the big cosmic elements of Bitcoin relative to it being an asset, which is rare and not replicable, and nobody else’s liability. I think that’s what got it started. You know, like, digital gold is what they were calling it originally. But I think what’s what’s really got it moving has been just speculators who have no concept of any of that. So, you know, I mean, so it’s, it’s been a, let’s say, a marginal headwind. I do think that at the end of the day, you know, what’s happening is gold right now, is the reason that money’s coming out of gold ETFs is because, number one, we’re having this Goldilocks scenario, or this narrative of this Goldilocks, but number two, is that higher rates to cause an opportunity cost to hold the gold, which yields nothing, right, so so it’s a, it’s a natural correlation to see savers, sell some gold when interest rates go up, and maybe put that into a money market fund, which is right now yielding like, we have a money market fund here, which is yielding 5.3% or 5.4%. And it’s all US Treasury money markets. So like, you know, there is that element of it. So, you know, I think gold’s kind of been doing what in terms of the ETF flows, it’s been doing what it probably should have been doing, or it’s been doing what, what makes sense, you know, from a correlation perspective relative to interest rates. But, you know, from a from a Bitcoin, you know, I just think that that’s going to be like, my big picture on Bitcoin is that like, number one, again, the central banks are gonna buy gold, or and or buying gold. Number two, if we do, in fact, have a severe inflation in the United States, a hyperinflation, something similar to what’s happened in Argentina, Argentina dollarized as its economy, the United States if there’s a hyperinflation here, we can’t dollarized our economy and we’re not going to like tie our currency to the Canadian dollar, you know, Jimmy, or the word worth it, or the euro or the Mexican peso, what you know, you know, what are we going to do? We would tie our currency to gold, because we have the biggest result we have 8300 tons of gold so like, you know, Peg our currency to gold so, so like gold is this and when people I guess the big picture points when people start to really start to think in that Cosmic weigh about gold, what it really is the qualities that make it what it is, I think that they’ll go there instead of Bitcoin. So I’m, you know, confident that that gold’s going to maintain its position notwithstanding that this kind of speculative interest in in Bitcoin?

James Connor 35:22
Yes, there’s nothing better than gold in the hand.

Chris Mancini 35:25
Exactly hard asset, right, you can drop it on your foot and actually hurts, right? So you know, it’s there.

James Connor 35:30
Chris, a lot of the discussion so far has been focused around the retail investor and why they’re not buying gold and gold equities and why they’re trading at big discounts. But I’m sure you’re aware of the fact that Costco started selling gold bars in the latter part of 2023. And during their last quarter, they made mention of the fact that they sold over $100 million with a gold which is quite a bit, and they have 72 million members. So there could be huge demand coming from these members. But I’m curious on why you think Costco started selling gold? And also what does this mean when you see this amount of people buying gold? Yeah, I

Chris Mancini 36:09
mean, I think that’s, that’s actually really great points very meaningful. I mean, I think cuz it does come back to the whole like, like, what I was saying in terms of interest rates and GLD flows, and that, I think that there is some element of of that being retail, you know, like the the GLD flows relative to interest rates, but I think it’s also correlation traits, like GLD is very liquid, I think it’s, it’s something like $55 billion in GLD, trades all the time. Very, very liquid. Again, I don’t know that billions of dollars are Tracy, but I do think that like that, that algos and that macro funds use it as a way to kind of manifest another trades. So meaning, meaning like how do I get on higher short term rates, and they’ll do that through selling or shorting GLD. But when you look at the retail, like the average mom and pop on the street, they do feel that something’s not right. You know, they do they do understand they’re like, wait a second, why have things gone up so much? Why, you know, like, what, what was happening where they were just sending me checks in the mail, like, oh, like, my buddy was paid to stay home and not work. And then he was you know, trading bitcoin trading, what it like to do this just doesn’t, just doesn’t feel right. And, and, and I think that that’s being manifested in the purchase of all this gold at Costco, WalMart has started selling gold. And what’s what’s noteworthy also is that Costco says that they sell out, like, really quickly, like, like, who knows how much they could be selling, if they were really stock at there. So, so I so I think that you know, that it is meaningful in that like, in that the average man on the street in the US does understand that, or does have a feeling that things just are really unsettled. And they want to have that hard asset.

James Connor 38:07
Very good point, Chris. And I also shop at Costco, and every time I go there, and I’m dropping 500 bucks, some, and I’m not buying any gold bars, but I can’t get over the rate of inflation that we are now experiencing throughout the economy. And even though the goal, the government says it’s only running around three to 4% I don’t believe that for one second, I think it’s significantly higher. But what are your thoughts on that? Yeah,

Chris Mancini 38:32
I mean, I have, I have four kids, and you know, and they and they eat a lot. And, and like, yeah, it is, it’s, it’s so expensive to go to the grocery store now. And it just Yeah, and it’s just not it’s not adding up and you see the price of things like, you know, a bag of chips is really, you know, five bucks, and it’s just it’s not, it’s not adding up people see that? You know what I mean? Like, and they’re like, wait a second, you know, let me just have, I think, let me just have a little bit of gold here. So, you know, and I think it makes sense. I think it makes sense.

James Connor 39:10
No, and thank God, the price of oil is hanging around in the low 70s. Because if it were to break above 100 or 125, man, we would be in for some real trouble. Yeah, exactly. Exactly. Yeah. So Chris, I want to move this discussion now toward what you’re hearing from investor investors and advisors. I know you speak to a lot of investors on a regular basis, but I’m curious to hear what you’re hearing from them just in terms of gold versus Bitcoin debate.

Chris Mancini 39:37
I think that by and large, what’s interesting, I mean, I think by and large, they asked the question, I mean, and by and large, also, in the advisors who are established or older, you know, they’re, like, my age or older. I’m 47. Right. So so they they are kinda like, you know, what about Bitcoin, you know, they aren’t, they aren’t saying that they’ll have Bitcoin over gold, but they’re just asking about it kind of like you did. But there are younger ones like, like, you know, I was telling before Iver friend who was a very successful advisor in New York City. And I spoke to him about gold a couple of like, maybe two years ago now. And, and he was saying, you know, he’s like, No, I’m not in gold. I’m in I’m in Bitcoin, I’m in crypto and math kind of thing. So, I mean, there is that there was that age, kind of like bifurcation there, I think, to an extent, but, but I think that, that, I think that people do realize, like, again, the conversations by and large are just like, like, they, they realize that gold has been around, obviously, since the beginning of time. And there’s, there’s there’s some value to that, you know, what I mean? So So, I mean, it’s it’s a it’s it’s more questioning now than then affirm, you know, forget gold, I would pick one.

James Connor 41:10
Well, Chris, that was a great discussion on gold and gold equities, and what the benefits are in terms of owning it in your portfolio. As we wrap up, an investor would like to learn more about you and your thoughts on gold, or learn about the gold belly gold fund, where can they go? Well,

Chris Mancini 41:26
I mean, actually, you could email me directly. I’m see man cd@gabelli.com. And I’d be happy to get emails from you. And you could also call one 800 Gabelli. And if you have any questions, like if you’d like to invest in the Gabelli gold fund, you know, we’d obviously be thrilled and and you could call them and, and, and they could help you out, they could answer questions, they could even put you in touch with me. If if they can’t answer your questions, I’d be happy to talk to you actually. And, and, yeah, and also, like, if you’re on like Fidelity or Schwab, or whatever. The capelli gold funds, that is the symbol, the symbol, there’s gol dx.

James Connor 42:18
Well, Chris, after giving out your personal information, you might be inundated with emails and phone calls.

Chris Mancini 42:23
I mean, it’s interesting, you know, I that’s, that’s fine. I look forward to the questions, you know, and I, you know, and we’ll see how they come. I don’t have to answer right. But, but but you can still send No, but I will, I will answer them if you send them. So yeah, see what happens.

James Connor 42:42
Well, Chris, that was a great discussion. I want to thank you very much for making time today. And I look forward to our next discussion.

Chris Mancini 42:47
Okay. Yeah, sounds great to me anytime. Well, I

James Connor 42:50
hope you enjoyed that discussion with Chris man Seanie. And you gain some insight into the benefits of owning precious metals in your portfolio. One of the reasons we do these interviews as they help you determine where the economy is going and also determine the impact that certain assets will have on your portfolio. And if you need help in understanding what’s happening in the economy, and also how to structure your portfolio, consider having a discussion with a wealthy on endorsed financial advisor at wealthy on.com There’s no obligation to work with any of these advisors is a free service that wealthy on offers to all of its viewers. Once again, I want to thank you very much for spending time with us today and I look forward to seeing you again soon.