Voima Weekly #16 – LBMA Kyoto: The Banks Are Back in Gold

Kyoto, Japan. Photo from own collection.

We attended the annual precious metals conference organized by the London Bullion Market Association in Kyoto, Japan. This was the third time in our company’s history that we have participated in the event.

The conference is the most significant gathering in the precious metals industry exclusive and expensive — bringing together professionals from refining, manufacturing, logistics, banking, central banks, mints, and selected intermediaries. Above all, it offers an opportunity to build new partnerships, meet colleagues from around the world, and gain insights that are not yet widely known.

This year, the conference had an unusually strong presence of banks — including several that hadn’t attended for many years. I personally met institutions from the UK, the US, France, Germany, and Japan.

The reason I wanted to write about this is what they told me: many of these banks are returning to the gold market — or have already returned — after previously shutting down their trading desks.

Is that a surprise? Not really. The past few years have brought unusually sharp political and monetary turns — and gold is clearly back in fashion. The average price forecast among participants for the next 12 months was $4,980 per ounce — roughly a 25% increasefrom current levels.

One recurring theme in the discussions was the multipolar nature of gold demand. The market is no longer driven by a single force, but by several structural trends acting at once.

First, there is the debasement story — inflation and debt eroding the real value of money. Second, de-dollarization, accelerated by geopolitics and central bank diversification, has made gold once again a strategic reserve asset. And third, investors — both institutional and private — increasingly see gold as a hedge and a form of diversificationamid financial repression, policy uncertainty, and market volatility.

These three dynamics — debasement, de-dollarization, and diversification — are pulling gold from different directions, making today’s demand broader, more resilient, and more complex than it has been in decades.

Japan was a fascinating place to observe all this. At the turn of the millennium, one kilogram of gold cost about 900,000 yen — today, it takes around 20,000,000 yen to buy the same bar. And perhaps the whole story was best captured by a comment shared during one of the panels — quoted by Amir Ravan, though the original speaker remained unnamed: “If you’re not long on gold, you’re long on politicians.”

There’s more truth in that than most would like to admit.

–Marko Viinikka
Founder, CEO
Voima Gold Oy

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.