The Biggest Gold Bulls From Denver On Why Rally Is Inevitable
(Kitco News) - With Dow Jones Industrial Average plunging more than 800points on Wednesday and gold climbing more than 2% on Thursday, are investorsfinally giving up on risk assets and shifting their weight to gold?
The Denver Gold Forum was a mixed bag when it came tosentiment in gold. There’s no denying, however, that the following threespeakers had the most unequivocal, bullish outlook.
CPM Group - When Stocks Go Down, Gold Goes Up
The economy is headed in the path of a recession, probablyaround 2019 or later, according to Jeffrey Christian, Managing Partner of CPMGroup.
Christian said that while gold may benefit from a recession,it will still take a considerable amount of negative economic data and a lossof interest in risk assets like equities before gold reacts positively.
“We really haven’t seen much negative economic news...andwe’re still stuck in that same place. I still think it’s going to take somecombination of economic data that causes investors to become more concernedabout stocks and more interest in gold again,” Christian told Kitco News on thesidelines of the Denver Gold Forum.
Christian noted that if investors dig deeper, the economy isalready showing signs of cracking.
“If you look at what’s happening with the budgetdeficit, if you look at what’s happeningwith interest rates; employment looks really good on the surface but if you digdown underneath the surface data there are issues; industrial production,capital investments look pretty good, but if you dig down underneath them,there are signs of topping out, so I think the economic data is relativelyrealistic right now, but that people are focusing on the short-term headlinedata right now as opposed to the economic underlying trends,” he said.
McKinsey - U.S. Debt To Blow Up
The Congressional Budget Office projected that the federaldebt will climb to 100 percent of gross domestic product by 2028. Ken Hoffman,senior expert at McKinsey Basic Materials Practice, said this is a primeopportunity for the yellow metal to regain its luster.
“When the U.S. is just going to print money endlessly andhave deficits endlessly, gold price really likes that,” Hoffman told Kitco Newson the sidelines of the Denver Gold Forum.
Hoffman said that big data will be a potential game changerfor the gold industry.
“They’re using Watson computers to look at stuff and findnew deposits. That’s going to be really interesting to look at,” he said.
Agnico Eagle - Gold Has Bottomed
Gold has seen a bottom and investors can expect a rally fromcurrent levels, this according to Sean Boyd, CEO of Agnico Eagle.
“We think gold’s bottomed here, the U.S. dollar’s beenunusually strong, things don’t stay the same forever, so I think it’s importantfor the industry to re-position itself through smart M&A,” Boyd told KitcoNews on the sidelines of the Denver Gold Forum.
Boyd’s comments came as Barrick Gold and Randgold announcedone of the biggest mergers in gold mining history, and he said this kind ofdeal is exactly what the industry needs right now.
“From our perspective, there’s far fewer high qualityopportunities and way too many players, so this idea of consolidating, maybeeliminating overhead, I think it’s a good thing, and I think we need more ofit,” Boyd said.
For Kitco News
Follow @davidlinMTL
dlin@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |