Evy Hambro, who leads thematic and sector investing at BlackRock, argues that gold’s value looks reasonable when judged by its purchasing power in the real world. He compares what one ounce of gold buys in food, fuel, land, or machinery today versus past decades to guide allocations to real assets and to value mining companies.
By this lens, gold still buys a basket of groceries about as well as it did thirty years ago, but it falls short for a house or a car, suggesting the price hasn’t fully caught up with its store-of-value role. Hambro’s yardstick is simple: measure gold by how much food, fuel, land, or machinery an ounce buys, then stack that against prior decades.
That framework steers how much money he puts into real assets and how he values miners. Today, the metal still pays for everyday groceries at roughly the same rate as thirty years ago, yet it buys less house or car—evidence, in his view, that the price has not fully reflected gold’s traditional long-term role.
He blames the gap on a steady loss of faith in paper money as central banks have issued ever more currency since the middle of the last century. Each unit buys less, and people living with runaway prices seek shelter in gold, while governments aiming to reduce dollar usage do the same. Both forces channel more money toward tangible assets.
Purchasing power and erosion of paper money
Mining equities are feeling the shift: Newmont shares have climbed about 140 percent so far in 2025, yet Hambro says valuations still lag a $4,000 gold environment. Analysts’ long-term forecasts sit at roughly half that figure, creating what he calls a “massive, massive” gap between spot prices and models.
If the price stays put, miners could earn far more than models predict over the next 12 to 24 months, forcing cash-flow and net-asset-value assumptions to be rewritten. Gold’s role as a shield against currency decay is growing, pushing allocators in multi-asset funds to reassess how much to hold.
Official digital coins or stablecoins might become tools for freezing or taxing money, a risk custody and compliance teams should monitor. Bitcoin calls itself “digital gold,” yet with wider price swings and a shorter track record, it serves a different purpose.
The next year or two will test Hambro’s view. If the metal holds above four thousand dollars, miners could deliver results that look “absolutely fabulous” versus today’s forecasts, with practical consequences for positioning and valuation.
