Good news! Gold investors aren't a dying breed

[View this email in your browser]( [Youtube]( [Kitco Metals]( Editor's Picks [@neils_C]( A new investors survey from State Street Global Advisors has been making the news rounds lately, highlighting a surprising trend in the gold market. [Kitco News was actually one of the first to cover this survey]( which reported that Millennials have the highest percentage of gold in their investment portfolio at around 17%. Both Generation X and Baby Boomers hold about 10% of their portfolio in gold. While it doesn’t sound like much of a statistic, this actually represents a historic shift in the precious metal and represents unprecedented untapped potential. I personally have been covering the precious metals market for more than a decade, and one key element of the market has been the average age of investors. The trend, until now, has been that gold is an outdated, archaic asset and was mostly seen as an investment tool for the older generation, a customer base that is slowly dwindling. It is exciting to see that [gold]( is attracting a younger investment crowd, and this segment is becoming a lot more affluent. The world is on the cusp of seeing the greatest transfer of wealth in history. In May, The New York Times took an in-depth look at the trend unfolding in the U.S. economy. The article noted that in 1989 total family wealth in the U.S., adjusted for inflation, was $38 trillion. By last year, that wealth had more than tripled to $140 trillion. It is expected that $84 trillion will be passed down from older generations to younger Millennials and Generation Xers through 2045. It appears that many of these young whippersnappers have an affinity for gold. Baby Boomers were attracted to gold to preserve wealth and purchasing power. The allure is not surprising as this generation came of age when inflation was in double digits, surpassing 13%. In fact, there are a lot of similarities between Baby Boomers and Millennials, and could be why gold is back in vogue. While inflation didn’t hit double digits, it rose to its highest level in 40 years in 2022. At the same time, while inflation may not be as troublesome as it was in the 1970 and 1980s, there has been a significant and steady decline in the purchasing power of the U.S. dollar. Gold was also an attractive safe-haven asset as the world went through the cold war between the West and Russia. Fast forward to today and the world has never been more fragmented since Russia invaded Ukraine last year. Economic lines are being drawn between allies and adversaries, and we are starting to see the emergence of a multi-polar currency world as the U.S. dollar sees its role as the world’s reserve currency dwindling. In this environment, it may make sense to hold something physical with no counterparty risk that is seen as a global store of value. But gold is more than just a practical investment; it is also accessible thanks to the evolution of exchange-traded products. Before 2004, if you wanted gold, you had to buy futures contracts or physical bars and coins. Today, you can buy and sell gold as easily as a stock. This is also just the beginning. The growing digital marketplace means that investors can buy fractional amounts of gold. The tokenization of gold means that investors can buy any amount of the precious metal they want, opening up new opportunities. There are far more smaller retail investors who can afford to buy $50 or $100 worth of gold than those who can buy a handful of coins, bars, or ETFs. Have a great weekend Neils C. 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