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Global Precious Metal Roundtable – Greece, China, Manipulation, Interest Rates and Outlook
Global Precious Metal Roundtable – Greece, China, Manipulation, Interest Rates and Outlook
- Recent events in Greece have undermined trust in the EU
- Sentiment towards gold cannot get much worse
- Increase in interest and demand for gold recently
- Elephant in room is manipulated gold and silver market
- Will sharp slowdown in China see fall or rise in gold demand?
- Gold served its function as safe haven in recent months
- History shows that gold prices rise with interest rates
- Gold has performed well in most currencies this year
The latest ‘Global Precious Metal Roundtable’ was recorded Wednesday and featured Jordan Eliseo of ABC Bullion, Bron Suchecki of the Perth Mint and Ron Stoeferle of Incrementum and Mark O’Byrne of GoldCore. Recent events in Greece and the EU, very poor sentiment towards, gold and silver manipulation, the relationship between gold prices and rising interest rates and indeed the outlook for gold were discussed.
The panelists agreed that trust in politics in the EU had been completely undermined with the latest ‘deal’ between the ECB, EU and Greece. The game of extend and pretend at the expense of people and entire socieites is now plain to see and euro-skepticism is on the rise.
These developments and recent events in China have caused a surge of interest in Goldcore’s research guides and market updates. However, despite record account openings from the UK and Ireland, the U.S. and Canada, many investors are funding accounts but holding off on buying due to the most recent bout of price weakness and very negative sentiment – particularly in the media.
Sentiment towards gold is very poor and the panelists agree that a catalyst may break that sentiment with Ronald pointing out that as prices rise investors tend to want to buy.
Gold has actually served its function in recent months. If you were in Greece with its capital controls or China with its collapsing stock market gold performed its role as safe haven.
With regards to manipulation, Mark pointed out that when central banks print vast sums of cash to buy bonds to suppress interest rates the last thing they want to see is a rise in gold prices. While there is no “smoking gun” commentators such as those at GATA have amassed a large body of circumstantial evidence and many astute and leading analysts in the gold market have come to the conclusion that gold is manipulated.
Manipulation should not be primary focus of analysts but important to keep an open mind and look at as one potential factor in the market. Ultimately supply and demand will dictate prices in the long term and manipulation will only work in the short term.
It was agreed that, historically, gold prices have risen in line with nominal interest rates. It is only an environment of positive real interest rates that is not so favourable for gold. The simplistic narrative that suggests that rising interest rates will be bearish for gold is incorrect. Indeed it would have far worse implications for stock markets and property markets and yet this is rarely warned of.
Gold has actually performed well in most currencies this year. In Euro and Aussie dollar terms, gold has delivered a healthy and sustainable 5% return so far in 2015. Investors should pay attention to prices in their own currencies – not simply gold in U.S. dollar.
Mark’s concluding comments were that it is important to focus on gold’s proven role as a safe haven, as an important diversification and hedging instrument in a portfolio. All the empirical data, academic and independent research clearly shows gold is a safe haven over the long term.
Bullion protects people from falling stock markets as seen in the 30% collapse in Chinese stocks recently. It has protected Greek investors and savers – from sharp falls in stock, bond and property markets. Indeed it has protected people in Greece from the recent draconian bank and safety box deposit withdrawal restrictions and from capital controls.
The ‘Global Precious Metal Roundtable’ can be watched here
Must-read guides to international bullion storage:
Essential Guide to Gold Storage in Switzerland
Essential Guide to Gold Storage in Singapore
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"Sentiment towards gold cannot get much worse".
Whose sentiment? This statement conflates the paper gold price with "sentiment", which is at odds with the acknowlegement that the markets are manipulated, which implies that the market does not reflect true price discovery, or true sentiment.
Sentiment towards gold has never been higher, according to China and Russia purchases (and probably the Fed too who I'm sure are trying to "buy back" Germany's gold at these prices).
"Ultimately supply and demand will dictate prices in the long term and manipulation will only work in the short term."
Riiiight. Supply and Demand. Got it.
He left out naked shorting, the printing press and captured regulators.
1 star.