Pierre Lassonde Says Gold Could Hit $25,000 in 30 Years
The comments below are an edited and abridged synopsis of an article by Frank Holmes
This year marked the 30th anniversary of the Denver Gold Forum (DGF), the world’s most prestigious precious metals equities investment conference, at which Pierre Lassonde was a speaker.
According to Lassonde, the co-founder of Franco-Nevada, the first publicly traded gold royalty company, annual global gold demand has exploded since the first DGF was held. Demand has grown more than fivefold, from a value of $32 billion in 1989 to $177 billion in 2018.
Today’s central banks are net buyers of gold, as they seek to diversify away from the US dollar. But 30 years ago, they were net sellers. In 1989, banks collectively unwound as much as 432 tonnes from their reserves. Compare that to last year, when they ended up buying some 651.5 tonnes, the largest such purchase since the Nixon administration, with Russia and China leading the way.
Lassonde pointed out that we’ve seen a significant shift in gold demand over the past 30 years, from west to east, as incomes in China and India have risen. In 1989, their combined share of global demand for the precious metal was only about 10%. Today, it’s 53%.
Up for discussion: China and India now represent more than half of total global gold demand; what will the gold price be in 2049; ESG (environmental, social and governance) investing goes mainstream; and gold’s green credentials may be understated.
