BlackRock’s Evy Hambro: Gold Still Undervalued on Purchasing-Power Basis
BlackRock’s Evy Hambro said gold “could go a lot higher” despite record prices, noting that internal long-term price assumptions still lag the current spot level, while miners’ margins are among the strongest he has seen.
Speaking to Bloomberg TV on Tuesday, Hambro reframed the question of gold’s valuation, emphasizing what the metal can buy rather than its headline price. He noted that gold stretches further for everyday goods but buys less of high-end items like U.S. pickups or prime Manhattan property. This, he said, challenges blanket claims of overvaluation and underscores the importance of the reference basket used.
Hambro placed gold’s performance in the context of a broader macro adjustment, with investors reassessing real assets versus paper currency. Short-term volatility can be amplified by momentum and speculative flows, yet the underlying fundamentals remain supportive. “If fiat money continues to be repriced relative to real assets, gold could go a lot higher,” he said.
The purchasing-power lens also explains apparent contradictions in sentiment: record-high prices coexist with investors still seeing upside. Gold has preserved or improved purchasing power for everyday goods, even if it lags on luxury items, making any single valuation measure potentially misleading.
Hambro contrasted gold with bitcoin, highlighting that both are shaped by inflation and currency debasement but follow different adoption paths and risk profiles.
On miners, Hambro focused on fundamentals rather than calling for stock outperformance. Margins remain historically strong, while analyst long-term price decks are still below spot and the forward curve. If elevated prices persist while analyst assumptions adjust slowly, miners’ earnings and free cash flow could continue to surprise, though volatility will remain.
He also differentiated gold from silver, noting silver’s industrial exposure creates unique dynamics. Current tensions in silver lease markets, he said, reflect supply shortages rather than mispricing.
At press time, gold was trading at $4,202.60, up 59.95% year-to-date, while bitcoin stood at $113,042, up 20.01% year-to-date, according to MarketWatch.
