Emerging markets want more gold

But the emerging markets want to catch up. According to gold expert Ronald Stöferle, who expects the price of gold to reach USD 4,800 per ounce by the end of the decade, the hunger for gold on the part of central banks in the emerging markets is a key price driver. Germany, for example, owns around four times as much gold as China. And more than 50 percent of the demand for gold comes from China and India. Emerging markets prefer to stock up on gold rather than US dollars. Currently, around eight percent of the reserves held by emerging markets are in gold. The World Bank has recommended that emerging countries hold 22 percent in gold. So, there is still huge potential. The interest rate cut in the USA has also contributed to the rise in the price of gold. And last but not least, conflicts and the immense debts of many countries, above all the USA, are ensuring that investors are happy to head for the safe haven of gold. Now that the price of gold has risen enormously, gold and silver shares should follow suit and become more attractive.

The price of gold is also always influenced by the strength or weakness of the US dollar. And if Donald Trump wins the presidential election, this could weaken the US dollar. This is because candidate Trump wants to support industry in the US by weakening the US dollar. If the US dollar weakens, this usually benefits the gold price. Lower interest rates also usually weaken the US dollar. Gold then becomes more attractive for international buyers and can provide a boost to demand. Investors should look at stocks such as Osisko Development and Chesapeake Gold in order to be there when gold mining stocks follow the gold price and rise.

Chesapeake Gold – https://www.commodity-tv.com/ondemand/companies/profil/chesapeake-gold-corp/ – owns the Metates project in Durango, Mexico, which contains gold and silver.

Osisko Development – https://www.commodity-tv.com/ondemand/companies/profil/osisko-development-corp/ – aims to become a mid-tier gold producer, focusing on early producing projects in Canada, Mexico and the USA.

Current company information and press releases from Osisko Development (- https://www.resource-capital.ch/en/companies/osisko-development-corp/ -).

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