Show Notes

Central banks bought over 1,000 tonnes of gold in each of the last three years — the fastest accumulation since the 1970s. Rohan Kapoor, macro strategist at Meridian Capital, joins us to decode the shift.

• Why gold, why now: Sanctions, reserve diversification, and the slow erosion of dollar hegemony.
• The RBI's playbook: Why India's central bank keeps adding to reserves even at record prices.
• The retail angle: Gold ETFs, digital gold, and whether the rally has room to run.

Key Points

1. The structural bid

   • Central banks bought 1,000+ tonnes of gold annually for three straight years — a regime change from the 1990s and 2000s, when they were net sellers.
   • The trigger: frozen Russian reserves showed every dollar holder the same risk.

2. RBI's strategy

   • India's gold share of total reserves has climbed steadily; gold acts as an inflation hedge and a sanctions buffer.
   • RBI buys on dips — a signal that this is strategic accumulation, not momentum chasing.

3. The demand stack

   • Central banks + retail ETF inflows + Asian jewellery demand create a triple bid.
   • Mine supply is roughly flat — the supply side can't respond quickly to demand shocks.

4. Portfolio takeaways

   • Gold is insurance, not alpha — a 5–10% allocation is a hedge against fiat stress.
   • Beware the narrative trade: if the Fed pivots hard to cuts, real yields fall and gold benefits; if inflation stays sticky, gold benefits differently.

Transcript (Abbreviated)

Host: Rohan, thank you for joining. Central bank buying at this pace — what changed?

Rohan Kapoor: The 2022 sanctions on Russian reserves were the watershed. Every reserve manager in the world asked the same question: if reserves can be frozen, what is a reserve? Gold is the one asset that isn't someone else's liability.

The answer to "why now" is simple: because they can't buy it all at once. If every central bank front-loaded its target allocation, prices would spike violently. So they accumulate quietly, on dips, for years.

Host: And for the retail investor?

Rohan Kapoor: Treat gold as insurance. The rally we've seen prices in a lot — but the structural bid from central banks is a floor, not a guarantee. Keep it at 5–10%, and don't confuse a hedge with a return engine.