‘Gold – a strategic asset for security, stability and protection’ World Gold Council

Global Nuggets

By 31/10/22

At the recent LBMA global precious metals conference in Lisbon, over 700 delegates were asked their opinion as to where the gold price will be in 9 months’ time. Of course, it’s a difficult question to answer as there are so many buttons and levers that could be pushed and pulled in the timespan – what will happen to the US dollar? – what will happen in Ukraine and is there potential for the conflict to spread into Europe? – will China’s property challenges develop into a wider meltdown for the Chinese economy? Will Trump re-emerge? No-one has a crystal ball, but among the 700-plus delegates in Lisbon last week, the combined opinion was that gold would be US$1845 an ounce in 9 months’ time. On Friday it stood at US$1645 an ounce. The delegates were all from the precious metals industry so one could argue that they naturally optimistic towards gold. So, what is the reality? The World Gold Council produces some very useful data and research on gold (www.gold.org) across a wide range of uses – from jewelry, to industrial and investment, at both an institutional and consumer investor level. Earlier this year they published the output from some research on the relevance of gold as a strategic asset in 2022. Gold benefits from diverse sources of demand: It is highly liquid, no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time. Without going through the research line by line (link below), the World Gold Council highlights that gold is a strong hedge against high and extreme inflation. In the years that inflation was over 3%, the research shows that gold’s price increased by 14% per year on average, and that this number increased significantly in years where inflation was much higher. Over the long term therefore, gold has not only preserved capital, but helped it grow.  

'The Relevance of Gold as a Strategic Asset' – World Gold Council

https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset-2022

Core inflation remains persistent

https://www.kitco.com/commentaries/2022-10-29/Core-inflation-remains-persistent-which-pressures-Fed-to-continue-large-rate-hikes.html

The West has stolen Russia’s gold reserves, says Kremlin

https://www.kitco.com/news/2022-10-24/The-West-has-essentially-stolen-Russia-s-gold-and-foreign-exchange-reserves-says-Kremlin.html

China’s property crisis

https://capital.com/china-property-price-crash-investment-economic-slowdown

Britain’s humiliation

https://www.theatlantic.com/international/archive/2022/10/liz-truss-fires-kwasi-kwarteng-tax-cuts-britain/671738/

$2 Quadrillion Debt Precariously Resting On $2 Trillion Gold

https://www.zerohedge.com/markets/2-quadrillion-debt-precariously-resting-2-trillion-gold