'Real' Gold Bull Market Is Coming, It Just Needs This First - Pierre Lassonde
(Kitco News) - Gold prices will only go up, rising as high as $1,400 next year, but the “real” bull market won’t get going until it sees an actual pickup in inflation, said mining magnate Pierre Lassonde.
“For gold to get into the next real bull market we need signs of inflation. So far we haven’t seen them,” the chairman of Franco-Nevada told German newspaper Finanz and Wirtschaft.
“The Federal Reserve and other central banks have piled up huge reserves. But there is no inflation because the money is sitting within the banks and they are not lending it. Therefore, you don’t get a multiplier effect.”
But, inflation could accelerate soon enough, with both reconstruction following the damage caused by hurricanes Irma and Harvey in the U.S. as well as a recovery in Europe moving the needle in the right direction, he said.
This year, Lassonde sees prices remaining between the $1,250-1,350 range and then rising up to $1,400 an ounce next year.
The only direction gold prices are likely to go is up, Lassonde noted in the interview, warning that production continues to decline, putting upward pressure on the yellow metal.
“If you look at the last 15 years, we found only very few 15 million ounce deposits. So where are those great big deposits we found in the past? How are they going to be replaced? We don’t know. We do not have those ore bodies in sight,” he said.
One of the reasons for that was that not enough money is being dedicated to exploration, Lassonde highlighted.
“The thing with this industry is that you have to have an incredible amount of patience and you have to have money. And right now, it’s hard to get money. The risk appetite of investors has been gone for many, many years,” he stated.
As of Monday afternoon, December Comex gold was last seen trading at $1,283.30 an ounce, up 0.22% on the day.