NEW YORK (Scrap Register): Jeffrey Nichols, senior economic adviser to Rosland Capital and managing director of American Precious Metals Advisors, looks for gold strength in the coming years.
The metal fell while stocks rose since the November election of Donald Trump as U.S. president. However, despite the yellow metal’s recently disappointing performance, the price of gold is likely to zoom much higher in the years ahead, perhaps doubling or even tripling from recent lows by the end of President-elect Trump’s four-year term.
Nichols cites interest in gold by the strong hands, with a shift from holdings by U.S. and European hedge funds and institutional investors to Asian gold hoarders -- both private-sector buyers and central banks.
China’s government is pursuing pro-gold policies, working to develop its gold-market infrastructure. And while Indian authorities have sought to discourage gold demand, the more it tries, the more people want to hoard the metal, Nichols continues.
Another potentially significant source of demand for the metal – with possibly huge price consequences – is the recent relaxation of Islamic Sharia law with regard to gold and the associated regulatory changes that will make possible investment in physical gold and other related assets by millions of religious Muslims around the world who, until now, eschewed gold. Meanwhile, global mine production is set to decline over the next five to 10 years, Nichols added.