Blog

Gold Market a Wildfire waiting to happen

Posted

The Gold Market Is A Wildfire Waiting To Happen – GAM

By Neils Christensen of Kitco News
Thursday October 27, 2016 09:13

(Kitco News) - One major international global asset management firm says conditions are perfect for gold prices, comparing the market to a potential wildfire that is just waiting for the right spark.

John Lambert, director of investment at GAM is bullish on gold, saying the market is a wildfire waiting for one spark
John Lambert, invesment director at asset management firm GAM

In an exclusive interview with Kitco News, John Lambert, investment director at GAM -- an investment firm with more than $119 billion in assets under management -- said that he sees a number of catalysts that will re-ignite gold’s uptrend.

“It doesn’t really matter what the specific catalyst will be. Gold has the potential to move higher,” he said.

One significant spark that Lambert said he sees in the near term could be potential U.S. dollar weakness, adding that the greenback’s current strength is based on “fiction.”

Although the U.S. dollar has lost some ground, prices remain near seven-month highs. The greenback has remained fairly resilient because of Federal Reserve posturing, but Lambert said that it could soon change as it becomes clear that interest rates will remain lower for longer.

“It’s impossible for interest rates to go up substantially,” he said. “Like it or not, we are in a world of trending lower economic growth.”

Not only will the U.S. dollar suffer because of low interest rates, Lambert said that global central bank monetary policy has gone as far as it can go and now governments are trying to boost economic growth through fiscal policies. However, he said that this will only result in higher debt levels.

The response to stagnant growth and higher debt levels could eventually lead to higher inflation, which will ultimately be positive for gold.

Another factor that could drive gold prices higher next year is geopolitical uncertainty as Europe faces a number of contentious issues like Italy’s constitutional referendum, elections in France and Germany and continued fallout from the Brexit referendum.

Brexit, Lambert said, was the first domino to fall, highlighting rising discontent for globalization. He added that it is still unclear what impact that will have on the European economy and the political landscape.

“The point of Brexit is that it proves that populism is here and it is real,” he said. “It highlights that there are growing risks to the very fabric of the euro zone. The next 15 months is going to be extremely volatile geopolitically and gold could be seen as a political hedge.”

Although Lambert is bullish on gold, he doesn’t have a price target for the yellow metal. He also said that he prefers exposure to gold through the mining sector. He explained that the GAM Global Diversified Fund has a 5.5% position in the gold sector, which is currently being evaluated following the correction since start of the month.


A history of the US gold standard

A history of the US gold standardEver since the U.S. left the gold standard for good in 1971, some politicians and investors have called for its return. At one of the Republican presidential debates in October, Texas Senator Ted Cruz became the latest, touting the stability and booming prosperity the U.S. economy enjoyed in the [...]

Read More »

Gols Sales Up 180%

U.S. Mint Posts 181% Jump In Gold Coin Sales, Silver Sales Hit 29-Year Record High In Q3 Thursday October 01, 2015 13:44 Gold and silver prices remain range-bound as markets await a potential U.S. interest rate hike at some point this year, however, bullion coin sales have never been better according to the latest data [...]

Read More »

This months Gold and Silver Fact!

Sept. 1st 2015- United States Mint sales of American Gold Eagle coins fell 40 percent in August from July's highest level in more than two years as concern about a slowing Chinese economy lifted bullion prices above a 5-1/2-year low, government data showed on Monday.American Eagle gold coin sales fell to 101,500 ounces, but that [...]

Read More »

Why you Need to own Silver!

Silver has been and will continue to be a precious metal that carries a high demand. Silver offers a great way for everyday American Citizens to save and insure their greenbacks. As far back as we can find silver has been a part of all civilizations that have a monetary system. From the small silver [...]

Read More »

Gold and Silver = Wealth Preservation

Owning precious metals has never been as important as now. Securing ones wealth is not an easy thing to do. We have very few options that bring privacy, security and long term growth that precious metals offer.  Over the last 20 years gold and silver have proven to be the finest tangible asset you can [...]

Read More »

Gold as Insurance?

Yes, Gold as insurance has become a very demanding business as well as a great long term strategy for growing or at least maintaining your wealth outside the dollar. Gold coins and bullion offer a great tangible asset that over time has shown through history to preserve and grow your wealth. Many US citizens have [...]

Read More »

Gold & Silver Bullion

Paramount Rare Coin and Currency is one of the nations top Gold and Silver Dealers. We offer Gold & Silver Coins and bullion coins and bars at great prices. Spend $100.00 or more in gold and silver and receive free registered shipping to your door. Its never been a better time to get involved in [...]

Read More »