Written by Bron Suchecki, Senior Precious Metals Project Analyst, Pallion and Company Secretary, Gold Industry Group
The Gold Industry Group joined more than 600 investors, bullion and finance industry professionals and media to learn about the global case for gold at ABC Bullion’s sold out national conference in Sydney on Tuesday 20 August.
Pallion CEO Andrew Cochineas (ABC Bullion’s parent company) kicked-off the conference noting that the Australian gold industry was a true bright light in the Australian economic landscape with a record gold price combined with the competitive advantage of a weaker Australian dollar.
Mr Cochineas also made a surprise announcement that ABC Bullion was partnering with IMG, the Australian Museum and Destination NSW, to bring the blockbuster exhibition Tutankhamun: Treasures of the Golden Pharaoh, to Australia in 2021.
Master of ceremonies, Nick Farr-Jones, then took the reins and introduced NSW Deputy Premier, the Hon. John Barilaro, MP, who, due to being held up in Parliament, provided his opening comments via a pre-recorded video. Mr Barilaro reminded attendees that Australia was the world’s second largest gold producer, mining over $20 billion worth of gold per annum, and that the resource sector was major contributor to the economy and cornerstone of job creation in many parts of regional NSW.
Keynote, Evolution Mining Executive Chairman Jake Klein, observed that the Australian gold miners index was trading near all-time highs and was outperforming global gold miners.
While helped along by a strong Australian gold price relative to US prices, Jake said that discipline with capital investments was essential to ensure adequate returns for shareholders. He emphasised the point with the “show me the money” clip from the film Jerry Maguire and Evolution’s dividend policy of paying shareholder 50% of free cash flow.
Economist and New York Times Best Selling Author James Rickards, then took the stage and explained the five forces that will drive the price of gold considerably higher:
the dynamics of the current secular bull market
the role of real rates
conventional supply and demand drivers
geopolitics and financial warfare considerations
potential for monetary reset or reform
Mr Rickards said that gold was still the best port in a financial storm as it performs in both serious inflationary and serious deflationary environments. He argued that we are currently living in a deflationary world due to declining population and productivity and the new bull market had many years still yet to run.
A lively panel discussion composed of James Rickards, Cor Capital Fund Executive Director Tom Rachcoff and ABC Bullion Global General Manager Nicholas Frappell followed, moderated by Nick Farr-Jones.
Mr Frappell challenged the panel with a number of questions with the final one being, for how much longer could central bankers keep kicking the financial can down the road? Mr Rachcoff said low and negative interest rates would putt a dangerous squeeze on bank profit margins that would increase risks and limit how long this could continue. Mr Frappell said it would be possibly another decade until government deficits and entitlement obligations were no longer avoidable.
Mr Rickards said that the increasing acceptance of modern monetary theory would enable government deficits and can kicking to continue. While he did not have a date when a day of reckoning would occur, he noted that when it happens it would be too late to buy gold so recommended an allocation to gold in case of that eventuality.
The next must-attend gold event, the Gold and Alternate Investments Conference, will be held from October 24 to 26 in Sydney. A number of Gold Industry Group members will be presenting at the conference and this year there will be a digital markets and gold day on Saturday 27 October. Early bird tickets (starting from $49) are now available.