Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
In a recent conversation with Investing News Network, Joe Cavatoni, senior market strategist at the World Gold Council, noted that gold investors should never underestimate the risk of systemic events, geopolitical or otherwise.
In addition to major demand drivers such as central bank purchases, the price of gold is being driven by different forces from both the Western and Eastern worlds.
He explains that the price of gold at this stage is less influenced by US interest rate expectations and the US dollar, and more by geopolitics and the overall investment outlook for Asian and eastern markets.
This has effectively signalled a real shift in overall global investor sentiment. He went on to say that western investors, who usually tend to buy gold in a big way when the price of gold is high, are now waiting on the sidelines for interest rates to start coming down.
At the same time, eastern investors, who usually buy less when prices rise, are continuing to buy. Of course, this has a lot to do with Chinese investors’ concerns about the currency and the property sector. Overall, he sees more upside for gold after hitting record highs earlier this year.
Cavatoni says the upside potential for gold is really exciting, but it may not just because of strategic investment, there may be some speculative investment as well, both in the Americas and in Asia. This is something investors need to watch closely next, especially to keep an eye on black swan events and the US election.
Cavatoni concluded by stating that it is important not to ignore the enormous pressure on financial institutions, banks, etc., and that once the risk of a systemic event arises, gold may tend to move a lot higher than expected.
