Gold’s bull run hit a new milestone on Friday, passing US$3,000 per ounce for the first time ever as investors flocked to the precious metal on fears around economic uncertainty, and one veteran gold watcher says he expects the buying spree to continue.
“Gold has done well in the last five years – a lot of people think that maybe this is it for gold,” John Ing, president and CEO of Maison Placements Canada, told BNN Bloomberg in a Friday interview.
“Well, the ingredients propelling gold are much higher. I’ve been saying for a time that gold is in a bull market and this bull market has just begun; there’s an economic uncertainty and that seems it’s going to continue for a while.”
Ing said that gold’s role as a safe haven asset that holds value during times of economic instability has led it to outperform “all markets” in the months leading up to and since the inauguration of U.S. President Donald Trump.
“It’s also recorded highs in all currencies – the main reason of course is the uncertainty with respect to the economy. We have, of course, the Trump administration and that has caused a lot of uncertainty,” he said.
“But more importantly, there’s a global uncertainty and that’s driven people to gold. We also have the central banks… they’ve bought up something like 20 per cent of the world’s supply of gold.”
Ing said that China has also been aggressively returning to the gold market, and that these factors have created scarcity in global supplies, which has only pushed prices higher.
He also noted that the industry as a whole isn’t producing as much gold as it used to.
“So, we have a squeeze going on, and that squeeze is reflected in the fact… that there has been a movement from the London warehouses to the New York warehouses in hundreds of tonnes of gold,” Ing said.
“One of the reasons of course is the fear of tariffs and that has caused the repatriation of gold, but there’s a lot of physical gold and movement back and forth, and I think there’s a shortage of that supply.”
Ing reiterated his belief that gold’s current bull market is “not even halfway,” and said investors should only consider selling their gold holdings when there’s some amount of economic certainty, which he doesn’t think will come any time soon.
“Until there’s some certainty, my expectation is that we are going to have higher gold prices, and in fact, gold stocks themselves,” he said, adding that Canadian gold miners are particularly advantaged by higher gold prices considering the current weakness of the loonie.
“If you’re a Canadian producer, you have a $4,000 gold price. That’s a lot of money, a lot of free cash flow, and what the gold miners have been doing is buying back shares and paying out dividends, so I think that there’s still a little bit of room here.”