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Joyce, just to pick up where we left off because we were talking about what we're seeing in the currency markets and what we're seeing with the dollar. Um, and so what are the dynamics just to pick this up and then throw it to our panel here um that are going to matter most here? So I would dis dismiss a lot of the talk about a Davos accord and even the DD dollarization I think that's exaggerated but the weaker dollar the bearish dollar trade I think is here to stay and I think that is because we're at a very proyclical phase in the cycle when we look at growth trends in the rest of the world you a Fed that is on hold in our view so I think weaker dollar um you know but uh you know upside risk that we are still seeing on the growth forecasts around the world not just in the us.
Yeah, Michelle, and I know you I know you focus on on this uh quite a bit, this idea of how geoeconomics, geopolitics, uh and domestic dealings and policy sort of intersect and play out in the markets here. I I just want to put up this chart because I think it tells the story uh and that is gold versus the dollar over the past call it year.
It's a very very dramatic chart. um the debasement trade as we just touched on here. your thoughts on you know Morgan I'm here in Miami at a at a small business conference the business credit conference and to Joyce's point earlier there's been a lot of nashing of teeth over the debasement trade the weakness in the dollar in New York City and Washington DC but when you get outside of those bubbles there's an incredible amount of optimism I'm surprised at just how opt how how much optimism I'm seeing here about the US economy they believe there's going to be a huge increase in demand for credit uh due to the strength in the economy and additionally they're not so worried about the dollar.
A lot of people here think that it was abnormally overvalued when it was trading at 110 on the dollar index and they remember when it traded in the 80s. So 96 doesn't actually look that uh crazy to them. Additionally, last year was a great year for emerging markets because of the weakness in the dollar and because of lower interest rates here.
And they think that's going to continue into uh 2026, which means a lot of optimism for emerging markets in Latin America where you can imagine Miami is the huge focus at this point. I want to get into that a little bit more, but first, Tom Lee, what say you? And how does this play out? Is is is gold over overbought here at $5,500 an ounce?
uh you know, gold and silver have been two of the probably most um eyepopping trades over the last 12 months and especially this year. I I it's hard for me to say how much of that is currency debasement versus investor demand versus uh price simply driving more demand. Um, as you may or may not know, like some investment funds in China have like the silver uh ETFs actually trading at huge premiums.
So, I I I think it's really eye popping. Um, but I might just say it might just be a lot of price momentum, too. And we've seen momentum here in precious metals, but not as much in the cryptocurrencies. And so, how much of this has been a rotation when you look at some of the recent weakness, Tom, in Bitcoin?
Uh yeah, crypto's been a huge disappointment because you know whether it's debasement or geopolitical uncertainty or central banks easing those have are tailwinds for precious metals. It really should be a tailwind for crypto but I think crypto had suffered and still hasn't recovered from that October 10th deleveraging.
Um, so you've seen the crypto market trying to recover and in fact early this year there was probably some momentum until the whole uh Greenland surprise and that caused another round of deleveraging. So I think crypto if in in my opinion is really uh watching this huge move in precious metals. There's a lot of FOMO for crypto traders and I think they're actually buying metals.
But in the past, these large moves in gold have actually been a precursor to a subsequent move in crypto. So I I think part of this is we're we're seeing a big move in sort of non US dollar assets and and that follows with crypto. Joyce, I see you nodding your head. Yeah. So I mean we've done some work looking at where gold prices could go and just a half a percentage point increase in the gold allocations by private investors means gold at 6,000.
So if you look at private investors having about 3% in gold, if they went to about 4 and a.5%, I mean, you could really be looking at over the next couple of years, gold at 8,000. So part of this is demand for diversification. It's also that you have gold demand coming from many different pockets, private investors as well as, you know, emerging market central banks.
And of course, you're seeing Morgan, you know, there's been a lot of increase in industrial metal demand as well. It's not just gold and silver. We've seen copper, we've seen zinc, we've seen all of these metals move. Part of that could also be because of this huge drive into data centers and the need for electricity.
Um, which could be not just a a currency play or a dollar to basement play, but it could also be a fundamental play as well.
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