Central Banks Stockpiled 1,000 Tons Of Gold In 2025, Should You Follow Suit? | Brett Heath
Speakers
Brett Heath
— CEO, Metalla Royalty & Streaming
Summary
Brett Heath, CEO of Metalla Royalty & Streaming, argues that central-bank gold buying and reserve diversification mark a structural shift away from the US dollar and US Treasuries. He sees gold, commodity-linked currencies, emerging markets, copper, and junior gold miners benefiting, while US Treasuries carry more risk. Heath also makes the case that Metalla's royalty pipeline, credit facility, and exposure to gold, silver, and copper position it for strong growth and a valuation re-rating.
- Central banks have bought over 1,000 tons of gold annually and gold is now about 20% of global FX reserves.
- Heath expects continued dollar weakness and further diversification away from US Treasuries.
- He favors gold, commodity-linked currencies, emerging markets, copper, and junior gold miners.
- He notes junior miners (GDXJ) are outperforming large miners (GDX) and silver is starting to outperform gold.
- He says mining companies have record margins and must replace reserves through M&A.
- He highlights Metalla's 30-35% production CAGR, up to $75M credit facility, and NAV sensitivity to higher long-term gold prices.
- Fed policy is discussed as politically influenced, with the 2-year Treasury implying around 50 basis points of cuts.
Ideas
Central bank buying supports structural gold bull
He expects gold to remain in a structural bull market because central banks are buying more than 1,000 tons annually for a third/fourth straight year, gold has overtaken the euro as the second-largest global FX reserve asset at roughly 20% and could move toward 50%, and reserve managers are hedging fiat devaluation, inflation, and US Treasury risk. He also argues gold is increasingly viewed as a neutral monetary anchor and store of value free of counterparty and political risk.
US Treasuries losing risk-free appeal
Central banks are actively reducing exposure to US Treasuries to lower credit and currency risk, and Treasuries in 2025 are no longer behaving like the traditional risk-free asset; he says they are increasingly viewed as risk assets. Large fiscal deficits and a big slug of debt refinanced from low rates to much higher rates reinforce the risk.
Dollar likely in long-term downtrend
The dollar's weakness despite tariffs is not a normal historical reaction but part of a continuing shift in which central banks diversify away from US Treasuries and dollar exposure; a World Gold Council poll showed 95% of central banks plan to increase gold reserves. While temporary dollar rebounds are possible, he sees the greenback starting a much longer-term downward trend.
Commodity currencies gain as dollar falls
As the US dollar breaks down, commodity-linked currencies should benefit. He specifically says the Canadian dollar looks positioned to do better and Brazil and other BRIC-type currencies are starting to do well, while a weaker dollar makes imported goods more expensive for US-dollar users.
Emerging markets outperform US markets
He sees a structural shift in capital flows where emerging markets are turning the corner and relatively outperforming US markets. If inflation returns, he expects capital to move into equities, but favors commodity-focused and emerging-market areas over the old guard that led the prior 10 to 15 years.
Miners have record margins and consolidation
The mining industry has learned from past mistakes and is not doing crazy M&A, leaving it with record margins; even with cost inflation, producers in the lower half of the cost curve are netting at least $1,000 per ounce and generating substantial free cash flow. After almost two decades of underinvestment, miners must replace reserves through acquisitions, and the market's shift to treating gold as a monetary anchor is attracting capital back to mining equities.
Junior miners outperform; GDXJ leads GDX
For the first time in about five years, smaller gold miners (GDXJ) are outperforming large miners (GDX), with juniors starting to move and more financings coming into the sector. Royalty and streaming consolidation and a large market-cap gap should drive further capital reallocation to high-quality juniors.
Junior miners outperform; GDXJ leads GDX
For the first time in about five years, smaller gold miners (GDXJ) are outperforming large miners (GDX), with juniors starting to move and more financings coming into the sector. Royalty and streaming consolidation and a large market-cap gap should drive further capital reallocation to high-quality juniors.
Silver starts outperforming gold
Silver is starting to outperform gold, a pattern that typically correlates with positive moves in mining companies and suggests a broadening precious-metals advance. It is a developing setup that supports the miners' bull case.
Metalla set for strong growth re-rating
Metalla has a bought-and-paid-for organic royalty pipeline expected to grow production at a 30 to 35% CAGR through the end of the decade; its assets were modeled at $1,200 to $1,800 gold so paybacks and returns are accelerating. A new up-to-$75 million credit facility enables larger, non-dilutive acquisitions, and its focus on tier-one jurisdictions, high-quality operators, and proven trends positions it to benefit from royalty-sector consolidation and capital reallocation to juniors. Management says every $100 increase in long-term gold price adds more than $40 million to NAV and the street still values gold below spot.
Copper supply-demand backdrop is very strong
Copper is in an absolute incredible place from a supply-and-demand perspective, and Metalla also has copper exposure that should benefit.
Up Next
This The David Lin Report video, published July 16, 2025, features Brett Heath discussing GLD, TLT, DXY, CAD, BRL, EEM, XLB, GDXJ, GDX, SILVER, MTA, COPPER. 11 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Brett Heath · Tickers: GLD, TLT, DXY, CAD, BRL, EEM, XLB, GDXJ, GDX, SILVER, MTA, COPPER