https://www.engineeringnews.co.za

Gold continues to be safe haven in these uncertain times

7th February 2017

By: Kim Cloete

Creamer Media Correspondent

     

Font size: - +

CAPE TOWN (miningweekly.com) – Experts believe the buying of gold for investment purposes is set to increase, as currencies decline. Uncertainty over decisions made by US President Donald Trump may also see investors heading for gold.

“There will be a lot of gold buying for investment purposes in the next few years. We expect increased demand from the whole world as currencies decline. It’ll be extremely positive for gold,” Matterhorn Asset Management managing partner Egon von Greyerz said on Tuesday.

Von Greyerz was a member of a high-level panel on the fundamentals in the gold market at the Investing in African Mining Indaba, in Cape Town.

He said he expected the US dollar to stay strong for a little while, but then take a turn for the worse in coming years. Massive debt will pile on the pressure for Trump.

“Trump has a very difficult task. I think he will be one of the most hated presidents in US history when he leaves, if he lasts five years. He has come into a country with massive debt and trade deficits since the 1970s.”

Newmont chief economist Tom Brady, who was also on the panel, noted that elections in Europe could also see investors going for gold.

“We will be monitoring the election situation, with an election in France in April, the Netherlands in March, and others. That could be a driver of an added safe haven.”

China will continue to be a rapid, growing market, World Gold Council member and investment marketing manager John Mulligan added. Gold consumption in China has grown by 330% since 2000, heralding a sharp break from the past, when it was illegal to own gold bars and coins in China. A growth in private wealth has sparked an interest in gold. 

Von Greyerz expects the trend to continue.

“We haven’t seen anywhere near the real demand coming from China yet. There are still up to 300-million people in the countryside in China, who don’t have access to gold today. We will see a major increase in demand from the Chinese people. This will continue to be the biggest market in the world for a long time.”

Mulligan said the fourth quarter of 2016 saw a resurgence in consumer demand for gold, with China’s remarkable surge in private investors and Germany also showing a strong interest.

The US election also triggered a change in the risk climate for investors there.

He said private investors were buying gold bars and coins, with a spike in private wealth buying for wealth preservation.

Harmony Gold COO Philip Tobias, meanwhile, said Trump’s election and Brexit had been to the advantage of South African gold players, including Harmony Gold.

Tobias said the South African gold market was still fairly competitive, although there was  room to improve efficiencies.

Edited by Creamer Media Reporter

Comments

Showroom

Rentech
Rentech

Rentech provides renewable energy products and services to the local and selected African markets. Supplying inverters, lithium and lead-acid...

VISIT SHOWROOM 
VEGA Controls SA (Pty) Ltd
VEGA Controls SA (Pty) Ltd

For over 60 years, VEGA has provided industry-leading products for the measurement of level, density, weight and pressure. As the inventor of the...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.075 0.126s - 137pq - 2rq
Subscribe Now