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Gold Prices Will Continue To Rise This Year,

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JD400 Member Level  Thursday, 05/09/19 10:16:43 PM
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Gold Prices Will Continue To Rise This Year, Says IFC Exec

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Gold will continue to rise this year, according to one financial executive.

Neil Pereira, principal investment officer of the International Financial Corporation (IFC), shared his thoughts on the precious metals landscape with Kitco News on the sidelines of the Mines and Money conference in New York.

“In the last year, we saw gold prices fall,” he noted. “But in the last quarter of this year, we’ve seen a big increase and I think that’s partly driven by expectations of reduced long-term interest rates.”

Pereira’s comments come a few days after the president of the Federal Reserve Bank of St Louis, James Bullard, announced that a rate cut was looking more attractive as it could possibly resolve issues of inflation and gain credibility for US markets.

But there are other factors affecting gold prices, according to Pereira. “We’ve seen investors going back into the ETFs, we’ve seen central banks in China, Russia, Turkey, and India all increasing their purchases,” he explained.

“Over the course of the next year, we’d expect to see gold continue to rise,” Pereira said. Within the logistics of supply and demand, he noted that although the market has been in balance for some time, the future includes long-term supply increases.

The IFC’s primary objective is to work collaboratively with the private sector to assist developing countries expand their mining industries. Most recently, it completed the Sangaredi project in Guinea, which Pereira said had an immediate impact on the local community, creating jobs and stimulating the environment.

“The employment is about 750 people, but if you look at a factor of 20 which is typical in developing countries, that’s probably going to affect 14,000 people in terms of jobs and opportunities and wealth creation,” he said.

Past experiences with foreign investment in developing countries’ mining industries have proven challenging. Pereira stated that the key to navigating the existing obstacles involves a two-fold solution. When dealing with governments, he said, it is important to ensure compliance with the mining code. When dealing with local communities, he spoke of the significance of securing the social license to operate.
By Sarah Abu-Shaaban

For Kitco News


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