Gold and macro environment, page-169

This article just appeared in the AFR. I have posted before about the potential for inflows into gold ETFs to drive the POG a lot higher as it did from 2003 to 2011. I still believe that generalist fund managers and most investors do not understand how big flows into gold ETFs could drive gold prices up. The quotes below in the article note 3 fund managers who realise the ETF gold inflows will increase possibly significantly over the next 6-12 months. Inflows have been positive for the last 2 months but it still very early days. Inflows into ETFs if strong may be the main driver of the POG not central banks.

BTW at the gold conference there were quite a few presentations on the macro view and all were very optimistic about the gold price going forward.

If there is a recession in the US later in 2024 or/and 2025, other than maybe a short retrace in the POG, we may see the POG a lot higher than todays high levels.

We may see a wild ride in gold equities in the next 12 months (maybe like the recent lithium boom.

“For now, Citigroup sees inflows into ETFs expanding significantly over the next six to 12 months, with demand bolstered by looser monetary policy, as well as a potential increase in volatility amid recessionary risks.

The market can expect large ETF flows, as well as ongoing speculator demand, when the Fed actually makes its first rate cut, according to UBS, which sees prices at $US2600 for the last quarter of this year.

It’s really notable that people are actually starting to move to that physical gold ETF side now,” said Ryan McIntyre, managing partner at Sprott, a Toronto-based precious metals and critical minerals asset manager with $US31.1 billion in assets under management.

“Buying through the ETFs is going to be a big, big part of gold’s story.””