John Norris (00:30):
Well, hello again, everybody. This is John Norris at Trading Perspectives. As always, we have my good friend Sam. Sam, say hello.
Sam Clement (00:35):
John, how are you doing?
John Norris (00:37):
I’m doing fantastically. I hope you’re doing great.
Sam Clement (00:39):
I’m doing well.
John Norris (00:41):
Are you doing as well as someone who has a bunch of gold sitting around?
Sam Clement (00:44):
Are you implying I don’t have a Scrooge McDuck-style pool full of gold? Maybe I do.
John Norris (00:49):
You actually do have a pool full of gold coins that you dive into?
Sam Clement (00:53):
Yes. Every night.
John Norris (00:55):
I have to tell you, though, it’s been a wild ride for gold. And as I’ve told you before, I was an early adopter and early purchaser of the GLD exchange-traded fund. This is the point in the program where I have to say that anything we discuss here should not be construed as an offer to buy or sell investment securities or financial services in any way, shape, or form. Any actions you take based on this podcast are done at your own discretion. Fair enough?
Sam Clement (01:22):
Fair enough.
John Norris (01:22):
Alright. I was an early adopter of gold exchange-traded funds—GLD—all the way back when I was at a previous employer before leaving in 2007 to help start Oakworth Capital Bank. I’ve always liked the asset class. Over the past 20 years, people have often asked, Why are you buying gold? It’s just a hunk of metal.
Sam Clement (01:47):
It doesn’t pay…
John Norris (01:48):
It doesn’t pay a dividend, doesn’t pay interest, and doesn’t generate earnings.
Sam Clement (01:50):
Not a ton of use-cases. I mean, there are some…
John Norris (01:53):
Yeah, there are some, but not a ton outside of jewelry and a few industrial uses. You could put it in Goldschläger, for example. But at the end of the day, it’s just a hunk of metal. So why would you want it in your portfolio, Sam?
Sam Clement (02:09):
Because it goes up. At the end of the day, that’s the reason to buy it. We can get into the weeds of all the reasons, but ultimately, that’s the bottom line.
John Norris (02:19):
We can talk about the malleability of gold, the fact that it doesn’t tarnish the way other metals do—even other precious metals. But in the end, gold is almost the perfect example of basic economics: supply and demand. There just hasn’t been much mined since the dawn of history. I ran some crazy numbers—I forget the exact tonnage of gold mined throughout the years—but if you were to stack standard-sized gold bricks like you would in a depository, it would only fill about an eight-story building in downtown Birmingham, like the Crest Building.
Sam Clement (03:05):
I think it was equivalent to an Olympic-sized swimming pool.
John Norris (03:06):
Yeah, there’s just not that much. It sounds like a ton of gold when you visualize it, but considering we’ve been mining it for 5,000 years—gold was mentioned in Genesis and Exodus—it’s not a massive supply.
Sam Clement (03:17):
Seriously, to think that the entire global supply of gold could fit in just a couple of Olympic-sized pools is mind-blowing.
John Norris (03:22):
And that’s really coming into focus this year as we’ve watched the spot price of gold continue to climb. Gold has been one of the better-performing asset classes—certainly better than bonds and cash—showing double-digit returns, depending on the timeframe you’re looking at.
Sam Clement (03:47):
Over 40% in the past year.
John Norris (03:49):
And now it’s over $2,900 an ounce. That’s pretty nice. So I have two questions for you: Why? And for how long?
Sam Clement (04:08):
How long am I going to hold it?
John Norris (04:12):
How long can we continue to see this type of outperformance from gold and other precious metals?
Sam Clement (04:19):
Well, starting with the why, the best way I think about gold is as a non-interest-bearing deposit. If you can generate interest elsewhere, gold can become less attractive. If I can earn 4–5% somewhere else, gold is less appealing. That’s why I look at it in relation to interest rates and real rates.
John Norris (05:52):
I agree.
People talk about gold as a hedge against inflation and dollar weakness, but the real reason to hold gold in the long term is that, regardless of whether the dollar is weak or strong, its purchasing power will decline over time. Every country with a fiat currency is devaluing its money supply by printing more every year. Gold, on the other hand, has a finite supply.
Sam Clement (06:14):
Exactly. If you compare gold’s purchasing power over decades, it has held up. A house that cost a certain amount in gold 50 years ago still costs about the same amount in gold today. That tells you it maintains its value.
John Norris (07:09):
I often tell this story: In 1900, an ounce of gold cost about $35. Now, that same ounce is worth nearly $2,900. The gold itself hasn’t changed—it’s still just an ounce of gold. But the number of dollars needed to buy it has skyrocketed. That’s a clear illustration of why holding some gold can help protect your purchasing power over time.
Sam Clement (08:56):
And it’s not a new phenomenon. The way people invest in gold has changed—GLD, physical-backed ETFs, private funds—but gold itself has worked as a store of value for thousands of years.
John Norris (09:54):
So, why now? And for how long?
The why now is straightforward: more people are comfortable with gold as an asset class, and they see the unsustainable fiscal policies worldwide. Governments are flooding the market with money and issuing more debt, which will eventually lead to some kind of economic reckoning—whether through devaluation, inflation, or slowdown. Gold is a hedge against that.
Sam Clement (12:00):
Right. It’s not necessarily that something will break in the next 12 months, but we’re heading in the wrong direction.
John Norris (12:17):
So, how long?
Until policymakers take meaningful steps to rein in spending and debt. If they don’t, interest rates will stay higher, economic growth will slow, and gold will continue to be attractive.
Sam Clement (16:12):
There’s no real endgame for gold. The same reasons it’s valuable today are the reasons it was valuable thousands of years ago.
John Norris (18:29):
Exactly. Gold has been a store of value since ancient times. We’ve always had some allocation to gold in our clients’ portfolios, and I suspect we always will. Whether you buy physical gold or invest through funds, it’s something worth considering for long-term protection.
Sam Clement (19:56):
Spot on.
John Norris (19:58):
Well, thank you all for listening! If you have any comments or questions, drop us a line at or leave us a review on your preferred podcast platform. You can also find more of our insights under the Thought Leadership tab at oakworth.com.
Sam, any final thoughts on the shiny stuff?
Sam Clement (20:25):
That’s all I’ve got.
John Norris (20:27):
Same here. Y’all take care.