An analysis made public by Australia\u2019s Datt Capital states that the price of gold, which has risen from $1400 per ounce to over $2075 per ounce in the past year, will remain firm in the coming months.<\/p>\n
According to the investment firm\u2019s managing director and CIO, Emanuel Datt, the yellow metal\u2019s strong appreciation has been driven by a confluence of environmental factors such as uncertain geopolitical and social environment, record low-interest rates, negative real rates in major fixed income markets, and accommodative monetary policy.<\/p>\n
\u201cThe combination of these factors has led to fears of stagflation, where economic growth is sluggish whilst inflation rises. We see this becoming more prevalent across all major economies,\u201d Datt said in his review. \u201cAlso possible is a deflationary scenario where sovereign defaults occur despite accommodative monetary policies on a global scale. Both situations are positive for gold investors.\u201d<\/p>\n Datt Capital says certain Australian companies are going to fare well in this context<\/p>\n<\/blockquote>\n<\/figure>\n In his view, the low-interest-rate environment, in particular, has made gold a far more attractive prospect for investment than ever before.<\/p>\n \u201cWhen interest rates are higher, for example at 5%, there is a real and tangible opportunity cost involved in holding non-yielding assets such as gold. Whereas the effect is diluted significantly in an environment where real rates of return are negative or zero,\u201d the executive said. \u201cAnother factor in play are gold ETFs which are booming with retail investors. Professional investors are also taking a keen interest with more looking beyond investing in conventional money market instruments to allocate capital towards gold in a hunt for diversification.\u201d<\/p>\n For Datt, certain Australian companies are going to fare well in this context. <\/p>\n In detail, he highlighted the cases of Saracen (ASX: SAR), whose Carosue Dam and Thunderbox properties have strong organic growth potential in addition to competitive production costs; Newcrest (ASX: NCM), a firm that has 93 Moz in gold resources across its operational assets, produced 2.2 Moz in FY20 and possesses global Tier 1, long-life assets at Cadia and Lihir; and Evolution (ASX: EVN), a company that has 22 Moz of resources, produced 750 Koz in FY20 and whose flagship Cowal project contains 9 Moz of resources.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":" Australia’s Datt Capital explains the environmental factors that have driven the yellow metal’s strong appreciation.<\/p>\n","protected":false},"author":92,"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":"","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":"","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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