George Gammon joins Kitco News to explain why he directs 10 percent of his income into physical gold that he NEVER intends to sell. He treats the metal as an insurance policy against counterparty risk rather than a short term inflation hedge. “I usually take 10% of what I earn and put it into physical gold just because it acts as an insurance policy,” he says. “I would never want to sell it.”
Gammon argues that the world still requires dollars for trade and debt service, yet central banks continue accumulating gold because every dollar is someone else’s liability. “Gold is the only reserve asset that does not represent a liability for anyone,” he notes- an added that we have emphasized repeatedly at SilverTrade.
Central banks purchased 289 tonnes in the second quarter, a record for any second quarter according to the World Gold Council. He links the buying primarily to geopolitical and counterparty concerns that intensified after 2022 sanctions rather than to pure inflation expectations.
On the current price action, with gold roughly 26 percent below its January high, Gammon says he would be quite surprised if it traded below 5,000 or 6,000 dollars in three to five years. He distinguishes physical holdings from speculative exposure and prefers mining equities for the latter. For paper gold inside a 401(k), he is testing a 200 day moving average rule that exits during confirmed bear markets.
He rejects the idea that rising Treasury yields are driven mainly by the size of the national debt and instead ties them more closely to nominal GDP growth. Gammon also questions the sustainability of the AI investment boom, describing it as “selling $20 bills for 10 bucks.”
He retired in 2012 and has maintained that long term purchasing power preservation, not trading, is the core role of his physical gold.
The interview frames gold as a practical, low counterparty risk reserve for both individuals and central banks while the dollar system remains indispensable for global commerce.
Gammon’s approach keeps the metal as a permanent allocation rather than a timing vehicle, with other assets handling growth and liquidity needs.
