De-Dollarization, Debasement & Diversification: Precious Metals with Nicky Shiels

Podcast Briefing: an Edited Q&A

The following Q&A has been adapted from the HC Commodities Podcast and edited for clarity and length.

The Three Forces Reshaping Gold Markets

Paul Chapman: Gold, silver and the Platinum Group metals have all seen a major run-up. What is driving that, and is this just a cycle or something more structural?

Nicky Shiels: We think about three structural forces driving gold today: de-dollarisation, debasement and diversification. Together, they help explain why gold has undergone such a significant rerating over the past two and a half years and why investors are increasingly moving into real assets.

De-dollarisation reflects a reordering of the global system, while debasement captures the macro backdrop of persistent inflation, resource scarcity and fiscal dominance. Diversification is about investors managing volatility, concentration risk and uncertainty. These forces are coming together and pushing gold, and then other metals, higher.

Why Central Banks Are Turning to Gold

Paul Chapman: On de-dollarisation, how much of this is narrative and how much can we see in the data?

Nicky Shiels: The clearest signal is in central bank behaviour. Before 2022, central banks were buying roughly 500 tonnes of gold a year. Since the sanctioning and freezing of Russian assets, that pace has more than doubled.

We are not seeing a clear exit from US Treasuries, but we are seeing a slower rate of accumulation. At the same time, demand for gold as a hedge against sovereign risk has increased. That shift tells you that central banks are diversifying rather than abandoning the dollar system entirely.

The Debasement Trade

Paul Chapman: Is the move into gold mainly about US policy risk or broader fiscal concerns?

Nicky Shiels: It is both. The freezing of Russian assets was the trigger, but the broader story is global fiscal dynamics and persistent inflation pressures.

There is a growing recognition that the system is constrained. Central banks cannot simply print their way out of these challenges. The likely outcome is currency devaluation over time. That realisation is evident across investors, policymakers and consumers, and it is increasingly reflected in gold prices.

Gold as a Portfolio Hedge

Paul Chapman: Are investors increasing their allocation to gold?

Nicky Shiels: There is a broad discussion underway about what an appropriate allocation looks like. Historically, that has been low single digits, typically below five per cent.

In the US, institutional portfolios are still underweight gold, with allocations below one per cent. Even a move towards two per cent would have a meaningful impact on flows and pricing. In contrast, markets such as China and India tend to hold higher allocations, as gold is more embedded in the investment culture.

Why Gold Supply Responds Slowly

Paul Chapman: Is gold supply a constraint, or is it simply a function of price?

Nicky Shiels: Gold behaves differently from most commodities because the majority of supply already exists above ground. That means the market focuses more on incremental demand than on primary mine output.

Despite a significant increase in prices, the expected surge in recycled supply has been limited. That suggests holders are reluctant to sell and may be waiting for higher prices. Primary supply plays a smaller role, while secondary supply and investor behaviour are far more important in shaping price dynamics.

What the US-Iran Conflict Revealed

Paul Chapman: Did the US-Iran conflict mark the end of the gold rally?

Nicky Shiels: Without that escalation, gold could have continued higher. What it showed is that gold behaves differently once a geopolitical event materialises.

Gold tends to perform in the build-up to risk events. During a conflict, it becomes a liquidity asset and can be monetised, particularly when prices are already elevated. In this case, oil absorbed much of the geopolitical premium, and gold became an opportunity for investors and central banks to take profits.

Gold’s Secular Bull Market

Paul Chapman: Are we at the end of the cycle or still early?

Nicky Shiels: Gold is in a secular bull market. Historically, these cycles have delivered larger gains than we have seen so far in this one.

From both a technical and structural perspective, there is still room for the cycle to run. The three underlying forces remain intact, and unless there is a material restoration of trust in fiscal and political systems, those drivers are unlikely to reverse. In the near term, gold may be range-bound, but the longer-term trajectory remains constructive.

How Gold Behaves in a Market Shock

Paul Chapman: What happens to gold in a broader market crisis?

Nicky Shiels: In a sharp de-risking event, gold does not operate in isolation. Investors typically sell across asset classes, so gold would likely decline alongside other markets.

However, that phase can mark the bottom of a cycle. In previous crises, gold sold off initially before rebounding as monetary and fiscal responses took hold. The same pattern is possible again, depending on the scale and nature of the shock.

Silver’s High-Beta Dynamic

Paul Chapman: Why did silver move even more aggressively than gold?

Nicky Shiels: Silver combines macro drivers with a tighter fundamental backdrop. It has been in a supply deficit for several years, driven in part by increasing industrial demand.

It is also a much smaller and more volatile market. That makes it more sensitive to flows and more attractive to momentum-driven investors. In that sense, silver behaves as a higher-beta version of gold, which explains the sharper moves in both directions.

Beyond Gold: The Case for Platinum and Other Metals

Paul Chapman: How should we think about platinum and other PGMs?

Nicky Shiels: These markets are driven more by fundamentals. Both silver and platinum are in deficit and are increasingly classified as critical minerals across major economies.

That matters in a world of deglobalisation and geopolitical fragmentation. Strategic stockpiling, growing industrial applications and the broader debasement trade are all contributing to renewed investor interest. Platinum, in particular, has expanding use cases across manufacturing, technology and AI-related applications.

Strategic Stockpiling and Regional Markets

Paul Chapman: Are we seeing evidence of stockpiling?

Nicky Shiels: Yes, particularly in trade flows. China has imported more platinum than its reported consumption would suggest, and US inventories have risen following tariff-driven shifts in trade.

This reflects a broader move towards regionalisation. Instead of a single global price, markets are increasingly fragmented. Pricing is becoming more localised, depending on geography, form and availability of metal.

What Could Drive the Next Move

Paul Chapman: What are you watching most closely from here?

Nicky Shiels: The Federal Reserve is the key driver. Policy direction will shape risk sentiment, the US dollar, and ultimately gold.

At the same time, physical demand remains critical. Outside China, demand has been relatively soft in recent months. The key question is whether retail buyers return and at what price levels, particularly across the Middle East, India and broader Asia. Those demand trends will be central to where gold settles in the near term.