George Frangeskides, Exec-Chair at Alba Mineral Resources, discusses grades at the Clogau Gold Mine. Watch the full video here.
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Minecheck,
Inflation based on what interest rate ?
Can't be a negative rate as that hasn't existed before recent times.
Hi Pardariff,
I agree with you about inflation and gold price. Studies seem to show that there is no guaranteed relationship.
Minecheck Thanks for that very clear explanation, as they say" knowledge is power" .
On a different tack when interest rates rise in the USA, the dollar strengthens which is usually bad for gold in the short term.
Do you concur that inflation on its own is not a guarantee of a gold price rise ?
Not at all Pardariff - it’s a bit niche.
In 1992 a hugely influential book was published by Francis Fukuyama called ‘The end of history and the last man’.
In this work, Fukuyama argued that western liberal democracy had triumphed over everything, and that this social, political and economic system was the end point of humanity’s struggles to find ways of governance. It was the end point - a universal system to which all states in the world would eventually move.
Western elites gleefully embraced this concept and developed foreign and domestic policy based on this assumed universal triumph.
Of course 30 years later it’s all gone horribly wrong. The 2008 economic crash was a devastating blow to the presumed infallibility of western economic capitalism. Meanwhile neither China nor Russia have embraced western political and social systems and values, and increasingly offer alternative systems of ‘managed democracies’. The West appears to be in retreat relative to Asian states, and the risk of major inter state warfare appears to be rising.
Which is why I alluded to this in relation to the statement suggesting that if gold hadn’t risen in 2022 then it will probably fall in 2023.
Because none of us can predict the future, and there’s nothing to suggest to me that gold has somehow had its chance this year and thereafter the door is closed.
Ade1234,
Not when they can still use paper to short the price down.
Minecheck Having read your recent post and excuse me for being a bit thick but what do you mean by an" end of history "
argument "
@Ade1234
I’d be interested to understand your reasoning. Do you think that high debt, rising inflation, and systemic shocks can not occur / exacerbate after this year?
Sounds a little like the gold equivalent of a sort of ‘end of history’ argument. We all know how the macro version of that argument played out.
The gold price is not exactly making massive gains but a steady rise is ok .On days like today any share rise is gratefully received !
Because poly mines, it has the added appeal of production and discovery uplifts which i think is a massive positive .
It’s great to see poly holding up well when the rest of the market is a sea of red. This is why we invest in gold right?
I would guess if Gold was going to make high gains again it would have already done it this year.
I can see Gold dropping next year.
pardariff,
It doesn't look directionless to me. We are still in a uptrend from end 2018 although consolidating ( mostly downwards ) from the Aug 2020 high. More recently the uptrend from early Oct 21 is still intact.
I have a feeling Silver might show more weakness than Gold going forward.
Don’t think anyone can really predict with any degree of certainty.
Personally I think that the combination of high sovereign debt, rising inflation, un-affordable net zero obsessions, and continuing Covid disruption will continue to de-base currencies and debt instruments as a store of value over the long term. That must make gold relatively more attractive.
But I’m no expert on this.
Leaving the geopolitics aside where is the gold price heading? .at the moment it seems directionless with the added impact of a new covid variant and inflation worries
Answers by this time tomorrow would be greatly appreciated !