Not Your Average Gold Bull

Published on
April 15th, 2019
30 minutes

Not Your Average Gold Bull

The Expert View ·
Featuring George Milling-Stanley

Published on: April 15th, 2019 • Duration: 30 minutes

George Milling-Stanley, head of gold strategy at State Street Global Advisors, gives his view of the yellow metal. With nearly half a century of analysis under his belt, George unpacks the fundamentals of supply and demand, price action and portfolio sizing. Filmed on March 11, 2019 in New York.



  • SB
    Stephen B.
    2 May 2019 @ 19:45
    A great interview but: (i) not a single mention of the rampant manipulation in the gold market?; (ii) no mention of vehicles like Miles Franklin, and Simon's business as way of holding gold? (iii) no mention what gold holdings in excess of 10% do for a portfolio. It therefore felt like an establishment message.
  • DY
    Dmytro Y.
    26 April 2019 @ 10:10
    Is he really serious about gold miners equities? They mostly lost money to their shareholders over the recent history and did it in spectacularly disastrous way!
  • VP
    Vincent P.
    22 April 2019 @ 16:54
    Elementary! Interesting, so was the production cost somewhere just below the equilibrium like it is now? Is the current price of gold just an inflation peg? Is the CB purchasing of gold a function of balance sheet hedging and fears of indicative deflation if they don't support the metal? Also would be interesting for this gentlemen's view of gold vs crypto and its impact on gold's performance/interest. As a holder myself, concerns run deep about future price performance but also never lose sleep either. Lastly, I'd be deeply concerned owning GLD, SLV etc... as the spreads (discount to underlying) continues to widen over the passed several years. Swap it fast for physical on any sign of inflation or negative real yields in your base currency otherwise it can crash in a day like VIX!!!. Thank you.
  • RP
    Ryan P.
    20 April 2019 @ 23:43
    GLD is state street sponsored so no surprise on the plug there. IAU is 1/100th roughly of 1oz for investors looking to get the same exposure in a lower denomination. If your investing in a retail size of 5% one may think to look at something he mentioned briefly. Coins. Coins can be bought in many different denominations and offer another value layer on top of bullion as a hedge against gold moves. The large mints that produce coins by their year or specific trademark collect a value premium as only a certain amount are issued. Over years these become more valuable and increase in value. You can buy outright bullion coins , or “proof” (Read up on this). I will say this. Apmex is a fantastic site that sells a ton of volume and allows you to sell it back to them. Just add a coin or two each year as your wealth grows. If your looking for intrinsic value and the benefits of gold buying gold coins may be a logistically better way to gain exposure for the typical retail investor. Just a suggestion. It’s also a fun way to play the gold market.
  • VS
    Victor S. | Contributor
    15 April 2019 @ 23:16
    Your far to moderate... all paper currencies die... ALL ‼️Some last longer than others? They all end in default via bonds underlying or hyperinflation. The first hyperinflation 1789-1795 gold appreciated at its peak =600 x’s ! If it moved up 20’xs at a 5% allocation your net worth is intact. THAT IS THE POINT . GOOD INTERVIEW !
    • MK
      Mike K.
      16 April 2019 @ 04:09
      Great interview, but I'm with Trader Vic on this one. I wouldn't be holding GLD either - risk of collapse or a higher likely hood you're cashed out at yesterdays price on the day you need it most. There are many cheap liquid alternatives where one can hold allocated physical, safely. That's the way to go.
    • WM
      Will M.
      20 April 2019 @ 18:37
      Absolutely. Its the risk in the system that should concern everybody. 10% gold and 10% silver feels like a better goal as long as you can tolerate some losses if the market heads down.
    • WM
      Will M.
      20 April 2019 @ 18:38
      Apologies hit the button too quick... My biggest concern is a rising dollar driven by safe haven flows from Europe. This could push gold lower in $ terms.
  • AG
    Adam G.
    15 April 2019 @ 14:26
    Useless relic gold is.
    • JS
      John S.
      15 April 2019 @ 22:24
      Aside from the strategic benefits of non correlation, increased portfolio sharp ratio and reasonable long term average return, you're absolutely right.
    • WM
      Will M.
      20 April 2019 @ 18:21
      Adam you must be relatively young and thoughtless about history
  • SH
    Stu H.
    18 April 2019 @ 19:50
    Not much new here but a good introduction for the newer RV viewers who maybe considering adding Gold to a portfolio. He mentions GLD as the easiest way to own gold, sure it's easy but it also removes some of the very protective features you buy gold for such as 3rd party liability, new investors should be aware of this. He could also have mentioned that it's possible to own Gold in allocated storage, physical form, any jurisdiction, privately vaulted and insured, there are several very reputable companies offering this service. The best approach is some physical at home, the bulk in allocated storage and some (shorter term allocations) through ETFs. Just watch any Simon Mikhailovich interviews and you'll have a good understanding of how and where to invest in precious metals.
    • GB
      Gary B.
      19 April 2019 @ 14:58
      I'm in complete agreement with your concern about GLD and other ETFs that use gold derivatives rather than actual allocated physical gold as the asset held by the ETF. This is real risk of owning GLD. Some commenters also mention that gold has no FCF. That is true but part of the reason I own gold is as an insurance policy against crazy central policies that at some point may well cause chaos in the world financial system. Should you cancel your homeowners or health insurance because they don't provide ongoing FCF? Maybe you would, but I am very happy to have the insurance.
  • GG
    Gagandip G.
    16 April 2019 @ 21:41
    "Gold has appreciated 7% annually since 1970" You can't include the 1970s since the gold standard ended in 1971. Market forces violently repriced gold after it had been pegged for decades. Remove the 1970s and the annual return drops to 1.5% annually - which barely kept up with inflation.
    • GG
      Gagandip G.
      16 April 2019 @ 21:43
      (since 1800, the return has been 2.1%).
  • DC
    Dave C.
    16 April 2019 @ 02:28
    Interesting new face for RV. Solid enough views but far too sanguine, IMHO, regarding GLD being a proxy for physical gold. Personally, I would not go near GLD except for a very short term trade. Previous RV commentators have expressed similar concerns regarding GLD, one of the most noteworthy being Tony Deden. Caveat Emptor.
    • GH
      Gary H.
      16 April 2019 @ 18:57
      I agree. It's not terribly difficult to buy and hold physical gold as he made it sound to be. It's quite simple and inexpensive to buy/sell
  • GP
    Greg P.
    16 April 2019 @ 16:58
    Kind of a nothing burger interview in my humble opinion. No harm , no foul, I guess.
  • JB
    Jeff B.
    16 April 2019 @ 11:49
    I am not really satisfied with the arguments, a little bit placative and mainstream. I think Raoul Pal would have crushed this one...
  • NR
    Nelson R.
    16 April 2019 @ 01:56
    I enjoyed this interview and very much respect the guest’s long experience in the sector. However, if I had allocated to gold any percentage above zero of my client portfolios over the last 4 years it would have been a drag on returns and increased portfolio volatility. 4 years is not a short period of time in a career. Nothing should be permanently “allocated" to one’s portfolio. Like any other asset class you should own gold when the macro says you should own it, not before, not after.
    • LC
      Lloyd C.
      16 April 2019 @ 09:24
      Negative bond yields in Germany and Japan is surely a macro factor?
    • MM
      Michael M.
      16 April 2019 @ 11:23
      Interesting that you picked “last 4 years”, as it probably kept pace with, or beat, your fixed income over that time period.
  • SU
    Shakeel U.
    16 April 2019 @ 10:57
  • PC
    Philip C.
    15 April 2019 @ 22:19
    In a recent interview on SilverDoctors ( Jeff Christian said that his team took the efficient frontier theory of Roger Ibbotson from the 1980s and updated it with data up to 2017 and concluded that the optimum gold percentage in a portfolio is 27%-30%. If he's right, the old 5%-10% advice is out of date.
    • LC
      Lloyd C.
      16 April 2019 @ 09:31
      Given we're arguably at the end of a multi decade debt super cycle and we've hit zero lower bound on interest rates in many countries, it's possible that the allocation to Gold should be even higher because there's no further ability to drop interest rates below zero, which means continuous QE is on the horizon. This implies that hard assets should outperform for the foreseeable future.
  • gg
    georgy g.
    15 April 2019 @ 23:58
    I am sorry ... who cares? The best hedge is always growing FCF not a piece of metal. Years of gold discussions produced what?
    • LC
      Lloyd C.
      16 April 2019 @ 09:26
      what's the FCF of negative bond yields on long term treasuries? Surely for those investors, Gold would be a reasonable alternative?
  • FS
    Florian S.
    16 April 2019 @ 06:14
    RV should have asked to tell the „not so average gold story“. Unfortunately this was just general, and generic gold talk. Nothing new. It is all about the briefing, the agenda and the questions you ask. Know who you can leave on autopilot. Let Grant do such interviews.
  • GF
    Gordon F.
    16 April 2019 @ 03:00
    He ran his simulations at 2%, 5%, and 10%, and 10% gave the best results. Why not run 15%, 20%, etc., until the results start to decline? The points tested do not demonstrate that 10% is the best, only that it is better than lesser amounts.
  • NI
    Nate I.
    16 April 2019 @ 02:29
    In a serious crisis, you might not get your GLD or other ETF back that your broker has loaned out. You have counter party risk and no visibility into it. The US tax reporting is also a bit of a headache with the ETFs. The Sprott physical trusts help with the tax headache so I would use them over GLD (disclaimer: I have no relationship to Sprott and I get nothing from them - just saying what I have learned the hard way). The speaker (and all viewers of this video) should view all of the RV interviews with Simon Mikhailovich. I can't say enough good things about Simon. The speaker was correct to point out that owning physical has costs and challenges, but if you are going to buy insurance, it needs independence from the system. Otherwise you are plugging your generator into the grid in a manner of speaking. If you are strictly looking for the efficient frontier in a portfolio, then buy GLD (or better in my mind buy PHYS). If you want insurance and the efficient frontier, not such a good idea. Go buy Krugerrands, Maple Leafs, Eagles, bars, et al.
  • TW
    Thomas W.
    16 April 2019 @ 01:29
    Uh huh. Useless chatter. Not a word about the rampant price manipulation in the futures market or the larger price suppression scheme. Just what you'd expect from a World Gold Council mouthpiece.
  • TH
    Truman H.
    15 April 2019 @ 22:15
    Refreshing lack of hyperbole. Nice to hear non-hysterical, non-Armageddon-is-coming commentary on gold. Imagine 5-8% in a non-correlated asset that improves risk-adjusted returns -- what a concept! My RV subscription pays off yet again.
  • BB
    Bullionaire B.
    15 April 2019 @ 15:29
    Jeff Christian's 1968 - 2016 gold and other precious metal allocation study is worthy of a look if one is trying to determine the best percentage allocation to bullion, etc. It spans the full fiat currency era through bull and bears. You'd likely be surprised by his findings and how large a percentage gold bullion risk-reward faired against the S&P500 and US bonds/treasuries.
    • SS
      Shanthi S.
      15 April 2019 @ 20:59
      Yes, Jeffrey Christian’s finding came to mind when George mentioned the modelling they did on allocations up to ten percent, with ten percent providing the best results... if that’s so, why did they stop there? 25% isn’t so extreme.
  • ma
    mary a.
    15 April 2019 @ 20:58
    How curious that neither did RV ask about western central banks (including the SNB) divesting their gold holdings over at least the last decade, not did G M-S bring this up.
  • RY
    Ron Y.
    15 April 2019 @ 19:21
    Brilliant! I'd love to hear from him again a year from now, a year after that, etc. His perspective rings true in so many different metrics re gold, emerging markets, China, the Euro, etc. Very well done to the RVTV team for bringing him to our attention.
  • PB
    Pieter B.
    15 April 2019 @ 19:13
    That was great George! Thank you very much!
  • OT
    Omar T.
    15 April 2019 @ 14:21
    no picture of afro?
    • ns
      niall s.
      15 April 2019 @ 19:00
  • CS
    C S.
    15 April 2019 @ 17:06
    I dont see how anybody can call a piece of paper 'gold'. If gold is anything, it is the essence of physicality.
  • DP
    David P.
    15 April 2019 @ 16:12
    Really good interview and overview. Would be interesting to hear from him in the future, maybe more of a deep dive on gold futures market relative to physical.
  • cp
    claude-vincent p.
    15 April 2019 @ 16:08
    Excellent interview on gold. I rarely now provide positive comments on RV because the quality of interviews has come down generally speaking but this one is worth listening to.
  • TJ
    Terry J.
    15 April 2019 @ 14:55
    Another great video RV. It makes me laugh to hear sceptics say they could never contemplate holding gold because it does not yield anything. Yet some of the same people appear more than happy to consider holding certain government debt with a negative yield! Imagine where the gold price might go if everybody had 10% exposure to physical bullion (as opposed to the levered synthetic ETF variant). It could begin happening sooner rather than later if the MMT advocates get their way, and the deficit is allowed to balloon even higher! I hope RV gets Dr Lacy Hunt back soon to tell us why the adoption of MMT by the US government would be an absolute disaster.
  • RM
    Richard M.
    15 April 2019 @ 13:56
    Very good interview! Not your typical pitch (by either bulls or bears), just good solid advice!
  • DS
    David S.
    15 April 2019 @ 13:55
    I enjoyed Mr. Milling-Stanley recap on gold as an investment. Gold is and should be looked at from a portfolio perspective as a non-correlated and non-fiat FX currency deeply traded commodity. His 2 - 10% allocation is reasonable. Trading around your base allocation can be fun. DLS
  • HJ
    Harry J.
    15 April 2019 @ 13:38
    Without a doubt the most reasonable believeable sober analysis I’ve ever seen on gold. I’ll listen to this information again. Sure beats the humdrum crap we hear dayin - dayout. I hope and believe he’s right I guess we’ll see. Thanks RVTV
  • PJ
    Peter J.
    15 April 2019 @ 11:38
    Interesting view, very much at odds on the macro front from some of the consensus view here on RVTV. Enjoyed it as an alternative view
  • SG
    Sashi G.
    15 April 2019 @ 10:23
    A very thorough and holistic view of gold as an asset. The best I have seen in terms of being comprehensive.