The future of gold in 2018


London is a funny place at this time of year. The days are getting shorter, the weather is getting colder and investors are getting ready for a long winter.

The mood around the 121 Mining Conference last week could have been described as mildly optimistic and positive. It was a long way away from the upbeat FOMO investing and speculating environment in Australia at the moment.

However, there was one session that stood out for its enthusiasm that would make even the most bullish commentator blush.

In a panel session entitled 'Signs of a New Bull Market', fund managers from across Europe gave their views on the sector and where they think it is heading.

And where they see it heading is up - a long, long way up.

Doug Groh from Tocqueville Asset Management kicked off the discussion with comments that he saw $1,250/oz as a natural bottom based on marginal costs of production. 

Groh sees a steady increase in the gold price with $1,400/oz to be tested during 2018. Tocqueville invests in both equities and physical gold and recommends all portfolios hold at least 5 per cent gold.
Thomas Puppendahl, Managing Partner of Cartesian Royalty Holdings, believes that we are about to enter an explosive second phase in the current gold run.

Puppendahl is in the camp that believes that the gold price is being manipulated and that events in the US equity and bond market will see a rush on gold over the coming years.

Puppendahl believes that when the US markets correct, the run on gold will be so strong that a price of $10,000-$15,000/oz is not out of the question.

Egon von Greyerz, the Managing Partner at Matterhorn Asset Management, invests in physical gold as insurance against the destruction of value in the financial equities market.

von Greyerz has been investing in gold since 2002 and sees the current positive trend continuing for many years to go.

Where von Greyerz differed from the other panelists was on where he thought gold was heading over the next 5-10 years.

He said that while he can see the gold price exploding up to at least $10,000/oz, a gold price of $50,000/oz should not be ruled out (to gasps from the room).

Unfortunately, while this sounds great for gold investors, he said that the rest of the market would be completely stuffed and the world would not be a very pleasant place to live in.

A not-so-golden lining to a very upbeat outlook.

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