Could Donald Trump be a factor in the precious metal’s rise?
SmallCapPower attended the world’s biggest resource conference, PDAC 2016, and spoke with the top resource investment experts to find out what they’re telling their clients.
Global debt levels have become a big concern to many and could be influencing this recent shift into gold.
“It’s all a con game!” Jay Taylor, of Jay Taylor Media, exclaimed, saying the nations of the world have more debt collectively than at any time in modern history, much more than during the Great Depression of the 1930s. He thinks it’s because paper money is no longer backed by gold. And all this debt has only created sluggish economic growth.
Geo-political instability, especially concerning the potential outcome of this year’s U.S. Presidential election, is creating the kind of uncertainty that causes gold to thrive.
“We have the phenomenon of Donald Trump potentially becoming President,” John Kaiser told SmallCapPower, suggesting that the closer Donald Trump gets to the Republican nomination, and possibly the U.S. Presidency, the greater the fears of geo-political instability, which has historically sent people flocking to gold as a hedge.
The publisher of Kaiser Research online also cited greater inflows into gold ETFs so far this year as a positive for the precious metal. “Since the start of 2016 about 4.5 million ounces of gold have been added to gold-backed Exchange Traded Funds, which is a rise of about 20%,” he said.
Nearly all of the experts pointed to what seems like a global trend towards negative interest rates as being, perhaps, the greatest driver for gold.
Newsletter writer and geologist Brent Cook talked about a move to zero or even negative interest rates across the globe as well as the devaluating of currencies. Central bankers in Japan and the European Union have employed negative interest rates in what is considered by many to be a radical way to spur economic growth.
Mr. Cook also spoke of the fact that, globally, the mining industry is producing on average about 90 million ounces of gold each year, yet finding only 50 million ounces annually.
“This 40 million ounce per year gap has been building up over a number of years and that’s not being filled,” he added.