The Executive Edge: Trey Reik on Gold’s Unyielding Strength in an Uncertain World

January 15, 2025 | 
The Executive Edge

When Trey Reik speaks about gold, you listen—and maybe admire your Cartier LOVE bracelet a little differently. Who knew this timeless piece has been quietly outperforming the S&P 500 since 2000? (Hint, hint: anniversaries are always a good time to add to the collection).

On our recent Family Office roadshow in Europe, with stops in Geneva, Zurich, and Milan, Trey’s keynote had investors buzzing (and not just from the espresso). Given the overwhelming interest in his insights, I sat down with Trey to dive deeper into the dynamics of the gold market, exploring its historical performance, its role in today’s global economic landscape, and its future prospects.

Gold’s Remarkable Performance Since 2000

Gold’s meteoric rise since the turn of the century has been nothing short of extraordinary. Trey outlined that gold has surged nearly 900% since 2000, climbing from $275 to approximately $2,075, outperforming traditional asset classes such as equities, real estate, and bonds.

While the S&P 500 has grown by 350% gross (600% including dividends) and real estate indices have gained about 300%, gold’s steady appreciation stands out. Perhaps most compelling is its resilience—gold has recorded a significant correction in only three of the past 24 years, maintaining remarkable consistency across diverse economic conditions.

Trey attributes this consistent performance to the advent of unconventional central banking and the rapid accumulation of global debt. In the U.S. alone, total credit market debt has ballooned to $100 trillion, dwarfing GDP at $28 trillion. This debt-to-GDP ratio of 350% underscores the systemic risk. As Trey explained, the only viable options to address such imbalances are debt default or currency debasement—two scenarios in which gold’s intrinsic value as a store of wealth shines.

The U.S. Deficit and Its Implications for Gold

Trey delved into another critical driver of gold’s long-term appeal: the U.S. budget deficit. Despite years of warnings from market bears, the deficit has ballooned to $1.8 trillion annually, with projections suggesting similar levels for the next decade.

This normalization of emergency-level spending during non-crisis periods has exacerbated concerns about the sustainability of U.S. fiscal policy. The annual interest on U.S. debt now exceeds $1.2 trillion, surpassing even the nation’s defense budget. For global investors, this “doom loop” of escalating debt and rising interest costs is pushing gold into the spotlight as a hedge against systemic risks.

The Shifting Narrative Around the U.S. Dollar

Trey also addressed the growing sentiment against dollar hegemony —a fancy term for the U.S. dollar’s dominant role in global trade and finance (think of it as the dollar being the ‘king of currencies’ and don’t be embarrassed, I had to hit Webster’s too). This is a trend amplified by geopolitical events such as U.S. sanctions and the freezing of Russian foreign exchange reserves. Central banks around the world are turning to gold as a reserve asset, with purchases exceeding 1,000 tons annually in both 2022 and 2023—record-breaking levels not seen in over 50 years.

Organizations like BRICS are exploring alternatives to the dollar, focusing on bilateral trade using national currencies rather than creating a new global currency. This shift underscores the desire among many nations to reduce their reliance on the dollar, further bolstering gold’s allure as a stable and independent store of value.

Gold as a Hedge Against Market Extremes

One of the most striking aspects of our conversation was Trey’s analysis of gold’s role as a hedge against extremes in equity markets. He cited historical examples, such as the dot-com bubble of 2000 and the 2008 financial crisis, to illustrate how gold has consistently outperformed during periods of market volatility.

For instance, since the S&P 500 peaked at 1,500 in March 2000, gold has surged 900%, while the S&P has gained 290% gross. Measured in gold terms, the S&P is down 60% over this period. As Trey noted, when valuations in equity markets reach extremes, gold has proven to be the most effective hedge, offering both stability and long-term growth.

Final Thoughts: Why Gold Matters Today

After hearing Trey’s insights, I’m tempted to consider my Cartier bracelet not just timeless but also a savvy investment piece. If you’re wondering whether gold’s allure will continue to shine in today’s economic climate, check out the full interview. And remember: whether it’s in a vault or on your wrist, gold is always in style—and always smart according to Trey.

To hear more from Trey Reik, including his thoughts on the future of the gold market, watch the full interview below.

What are your thoughts on gold’s role in today’s investment landscape? And how often should you top up your jewelry collection? Share your perspective in the comments below.