{"id":14804,"date":"2025-02-11T08:53:37","date_gmt":"2025-02-11T08:53:37","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2025\/02\/11\/panelists-gold-essential-to-own-as-volatility-rises-and-reserves-diminish\/"},"modified":"2025-02-11T08:53:37","modified_gmt":"2025-02-11T08:53:37","slug":"panelists-gold-essential-to-own-as-volatility-rises-and-reserves-diminish","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2025\/02\/11\/panelists-gold-essential-to-own-as-volatility-rises-and-reserves-diminish\/","title":{"rendered":"Panelists: Gold \u201cEssential\u201d to Own as Volatility Rises and Reserves Diminish"},"content":{"rendered":"<\/p>\n

Gold has long served as a tool for investors to enhance their portfolios<\/strong>\u00a0and protect against volatility.<\/strong><\/p>\n

At the Vancouver Resource Investment Conference, CEO Jay Martin engaged with industry experts Frank Giustra, Grant Williams, Alastair Still and David Garofalo to explore trends currently affecting the sector. <\/p>\n

The group illustrated a market at a crucial juncture, with changing investor sentiment, geopolitical tensions and impending financial instability converging to potentially create the perfect storm.<\/p>\n

\n

Eastern vs. western perspectives on gold <\/h3>\n

Martin kicked the panel off by reviewing the last several years in the gold market. Looking back at 2019 and 2020, he noted that an influx of western investors helped pushed the metal\u2019s price to phenomenal levels.<\/p>\n

However, as the fallout from the COVID-19 pandemic drove inflation and interest rates, these investors became sellers, and gold started to sink. Capitalizing on these lower price points, central banks moved into the market and not only stabilized the price, but caused it to surge to all-time highs. By mid-2024, gold was 70 percent above its 2022 low.<\/p>\n

Frank Giustra, CEO of the Fiore Group, largely agreed with Martin\u2019s summary of gold\u2019s activity, but added that while he thinks central bank buying will continue, there is more going on than meets the eye.<\/p>\n

\u201cWhat most people don\u2019t understand about gold is that it\u2019s not that the gold price is going up \u2014 it\u2019s the fact that the fiat currencies that are measured against it are going down in value for a whole host of reasons,\u2019 he said. <\/span><\/p>\n

Giustra sees the US fiscal situation as a factor pushing the gold price up, and suggested that the situation is not only beyond repair, but also on the precipice of a crisis. \u201cAt some point there will be a US dollar crisis. It\u2019s going to happen in our lifetimes, probably sooner rather than later, and when that happens, gold will go through the roof,\u2019 he noted.<\/p>\n

Grant Williams, author at Things That Make You Go Hmmm, expanded on Giustra\u2019s point, outlining a critical difference between the east and west. \u201cIn the east, people don\u2019t buy gold to sell it because the price has gone up. They buy gold to own it, and when they do sell it, it\u2019s because they need to raise money for something important,\u201d he said.<\/p>\n

Williams also suggested that the west is at the end of a cycle. In his view, investors are attempting to maximize their returns in any way possible, and the system is corrupt and lacks consequences. <\/p>\n

\u201cThis is going to come to a head. We\u2019re in the middle of that process now, and at the end of that process, when these cycles fall over, the one thing you want to own is gold,\u2019 he explained at the conference. <\/p>\n

\u2018We are moving into the part of this where it\u2019s not just a good idea to own gold anymore \u2014 it\u2019s essential to own gold. And I think the price is going to reflect that in the coming 12 to 18 months.\u2019<\/p>\n<\/div>\n

\n

Tech stocks, Bitcoin distracting investors from gold <\/h3>\n

The panelists agreed that today\u2019s investors are distracted as tech and Bitcoin dominate headlines.<\/p>\n

While technology stocks still follow the typical market ebbs and flows, cryptocurrencies are a different story. <\/p>\n

Giustra even compared the crypto space to a Ponzi scheme, pointing to one influential commenter who has suggested that Bitcoin will reach a value of US$13 million and gold will reach zero.<\/p>\n

\u201cThese are ridiculous statements, but he needs to make those kinds of statements to keep the greed factor going. In any pyramid scheme, you need to have new buyers all the time to keep the game going,\u201d he said. <\/p>\n

Giustra also outlined how the cryptocurrency space has influenced the recent US election, spending US$245 million to influence Congress and the incoming president to ease regulations. This comes from a shifting narrative that implies crypto is a store of value. Giustra believes it\u2019s an asset class in search of a purpose. <\/p>\n

GoldMining (TSX:GOLD,NYSEAMERICAN:GLDG) CEO Alastair Still backed Giustra, saying that unlike gold, Bitcoins can be created every day, while gold\u2019s limited supply is inherently connected to its store of value. <\/p>\n

Still described how resource scarcity has been tested, outlining how geopolitically stable jurisdictions are diminishing. At the same time, mining companies have underinvested in exploration and been slow to find new assets. <\/p>\n

\u201cSo while I think many investors are a little behind the curve,\u2019 he explained at VRIC. <\/p>\n

\u2018What we have seen is the major operating companies, they\u2019re running deficits in their reserves, so they\u2019re not replacing what they\u2019re mining, and that\u2019s because they\u2019ve been underfunding exploration for years.\u2019<\/p>\n<\/div>\n

\n

Gold majors dealing with low grades, declining reserves <\/h3>\n

The systemic underfunding of exploration could be an opportunity for explorers and developers to start acquiring projects that will be sought by majors in the future. As it stands, miners are having to maximize extraction efforts.<\/p>\n

\u201cThe operators are mining lower grades. That doesn\u2019t necessarily mean they\u2019re making more gold. They might make more profit, but they are actually potentially mining less gold,\u201d Still commented.<\/p>\n

David Garofalo, CEO, president, chairman and director at Gold Royalty (NYSEAMERICAN:GROY), agreed that operators are facing a challenge. \u201cThey\u2019re facing a squeeze from tiny reserves, and reserves are down 40 percent. That\u2019s demonstrated because the juniors haven\u2019t had access to capital for over a dozen years,\u201d he said.<\/p>\n

He went on to explain that the entire industry is facing cost pressures. <\/p>\n

All-in-sustaining costs have risen along with the price of gold, leading to a squeeze among producers. Much of this is due to inflation, which has resonated throughout the general economy.<\/p>\n

\u201cThat\u2019s why when you look at the leaders in our industry, their share prices are lower today than they were 30 years ago, when the gold price was a 10th of what it is today,\u201d Garofalo said.<\/p>\n

Rising costs and chronic underfunding are causing a dual squeeze. No new projects are in the pipeline, and he doesn\u2019t expect the situation to reverse any time soon. Instead, he sees sees major companies like Barrick Gold (TSX:ABX,NYSE:GOLD) and Newmont (TSX:NGT,NYSE:NEM) with stagnating reserves and stalled output. <\/p>\n

They can grow their share count, but not the gold they have access to, they\u2019re not creating share value.<\/p>\n<\/div>\n

\n

Which gold stocks to focus on now? <\/h3>\n

Garofalo suggested that the right space to be in now is the development stage. He thinks the majors are approaching a point where they need to add assets to their portfolios to continue to grow.<\/p>\n

\u201cThe industry has basically been giving money back to investors for the last dozen years in dividends and share buybacks and whatnot, and not meaningfully back into the grassroots exploration to replace depleting reserves,\u201d he said. <\/p>\n

Likewise, Giustra backed the idea that the gold sector needs more consolidation. <\/p>\n

\u201cThere are far too many companies burning a lot of overhead. The industry needs to consolidate. We need to deliver performance. And so it\u2019s partially the industry\u2019s fault; for a long time, it hasn\u2019t performed. You need to perform economically with your deposits to qualify as an investment sector,\u201d he said. <\/p>\n

Williams added that it\u2019s important for investors to understand what they are looking for. He said that gold can be \u201ca get rich quick scheme, a get rich slow scheme and a stay rich scheme,\u201d depending on where you are in the cycle.<\/p>\n

\u201cThat shouldn\u2019t be your only focus. You shouldn\u2019t only be thinking about, \u2018Where can I find the 10 baggers?\u2019 If that\u2019s really your mindset, crypto is the perfect vehicle for that, because there\u2019s a 10 bagger produced every minute if you\u2019re lucky enough to get in and get out. This industry is tangible,\u2019 Williams said. <\/p>\n

\u2018It\u2019s things you pull out of the ground that are valuable.\u2019 <\/p>\n<\/div>\n

Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

Gold has long served as a tool for investors to enhance their portfolios\u00a0and protect against volatility. At the Vancouver Resource Investment Conference, CEO Jay Martin engaged with industry experts Frank Giustra, Grant Williams, Alastair Still and David Garofalo to explore trends currently affecting the sector. The group illustrated a market at a crucial juncture, with […]<\/p>\n","protected":false},"author":0,"featured_media":14805,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-14804","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/14804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=14804"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/14804\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/14805"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=14804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=14804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=14804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}