{"id":1139528,"date":"2019-09-20T16:51:05","date_gmt":"2019-09-20T21:51:05","guid":{"rendered":"https:\/\/www.mining.com\/?p=1002534"},"modified":"2019-09-20T16:51:05","modified_gmt":"2019-09-20T21:51:05","slug":"frank-giustra-predicts-explosive-gold-market","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1139528","title":{"rendered":"Frank Giustra predicts explosive gold market"},"content":{"rendered":"<p>The price of gold is headed for a new high, and when it does, money will flow to companies, predicts mining mogul and philanthropist Frank Giustra, chairman of Leagold Mining Corp. (TSX:LMC).<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>\u201cThis is going to be an explosive gold market,\u201d he told Kitco News in an interview earlier this month.<\/p>\n<p>\u201cThe world is in uncharted waters right now. We\u2019re living in a world with a global debt bubble, and any time you get debt bubbles of this magnitude that are global, that are fuelled by speculation, something\u2019s going to happen.\u201d<\/p>\n<p>That something, he forecasts, is the price of gold hitting $1,900 per ounce \u2013 an approximate 27% increase above the spot price for gold midday on September 11.<\/p>\n<p>The prediction comes with a caveat: the potential for gold prices to boom comes in the context of a forecasted global economic bust.&nbsp;<\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>  The mining mogul forecasts the price of gold hitting $1,900 per ounce  <\/p>\n<\/blockquote>\n<\/figure>\n<p>Over the last six months \u2013 which have seen worsening U.S.-China trade tensions, Brexit complications and an inverted yield curve in markets around the world \u2013 the price of gold has risen around 15%, according to data on gold spot prices from goldprice.org on September 11. It\u2019s also up nearly 24% year-over-year.<\/p>\n<p>The year-to-date price appreciation of gold has been sizable, said Sean Coakley, market strategist with Cambridge Global Payments.&nbsp;<\/p>\n<p>\u201cWhat we\u2019re seeing is an emergence of fear \u2013 fear and a risk-off sentiment \u2013 and generally that\u2019s positive for gold relative to, say, equities or bonds,\u201d explained Coakley, calling the shift toward gold-denominated assets and bullion a tactical move on the part of investors.<\/p>\n<p>Gold, he said, is an exceptionally cyclical asset. Its highest peak to date, according to goldprice.org data, was nearly $1,890 an ounce in 2011. It could top that, but there is no guarantee for how long an \u201cexplosive\u201d market for gold could last. It could last six to 24 months, which could be a boon to investors and gold streaming companies, though it may not bring many sustainable business benefits to gold producers, said Coakley.<\/p>\n<p>The single most important determinant in the price of gold is global faith \u2013 or lack thereof \u2013 in the purchasing power of the U.S. dollar, said Rick Rule, president and CEO of Sprott U.S. Holdings.<\/p>\n<p>Gold does well, he said, when investors are concerned about the purchasing power of denominated investments, especially the 10-year treasury note.<\/p>\n<p>\u201cA lot of global investors \u2013 even generalists, not gold bugs \u2013 look at the 1.5% return on US treasuries and understand that they\u2019re getting a negative real, if not nominal, yield,\u201d Rule said.<\/p>\n<p>\u201cI think it\u2019s accurate to say that the current strength in the U.S. dollar is really a function of the weakness of its competitors, not any underlying strength in the U.S. economy or the ability of the U.S. economy to inspire confidence globally.\u201d<\/p>\n<p>It\u2019s not hard to find those bullish on gold predicting big gains for gold prices in the years ahead, particularly as signs that the global economy is slowing down continue to pile up.<\/p>\n<p>Rule noted that US bonds have been in a 38-year bull market, with bond yields declining since their peak in 1981.<\/p>\n<p>\u201cMy own belief is that, given the depreciation in yield, [the bond] bull market is either over or close to over.\u201d&nbsp;&nbsp;<\/p>\n<p>Rule added that if that\u2019s the case, and you believe that gold trades contrary to expectations of the U.S. dollar, as expressed by U.S. treasury securities, \u201cthat would suggest that the gold bull market is either begun or about to begin.\u201d<\/p>\n<p><em>(This article first appeared in <a href=\"https:\/\/biv.com\/\"  rel=\"noreferrer noopener\" aria-label=\"Business in Vancouver (opens in a new tab)\">Business in Vancouver<\/a>)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The prediction comes with a caveat.<\/p>\n","protected":false},"author":47,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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