Unlike Bitcoin, Gold Is God’s Creation; Look For Price Rally On Weaker Dollar
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(Kitco News) - Gold’s value as a currency lies in its uniqueness and its long history for being used as a reliable store of value, this according to Chris Mancini, analyst of Gabelli Gold Funds.
“The big picture story on gold has always been, and always will be the fact that it is an asset, a currency, that can’t be replicated and can’t be created at will like other currencies,” Mancini told Kitco News on the sidelines of the 121 Mining Investment conference in New York.
Mancini noted that cryptocurrencies and precious metals are fundamentally different, as one is man-made, and the other is not.
“Bitcoin has been corrupted because it’s a creation of man, and gold cannot be corrupted because gold is a creation of God,” he said.
He said that bitcoin is a means of payment, but is not necessarily a great investment.
Another problem with bitcoin is its limited use by major financial institutions and central banks, Mancini said.
“Global central banks are not going to buy bitcoin, so the Chinese central bank is buying gold and the Russian central bank is buying gold, they’re not going to buy bitcoin,” he said.
To compound the issue, bitcoin can be easily replicated, which erodes its value as a store of money, he added.
“The other thing that’s crazy about bitcoin is the concept of these forks that are created off of bitcoin. So there’s Bitcoin Cash, or Bitcoin Gold that’s been created off of bitcoin, so the concept of coming in and buying a gold coin down the street, putting it in my sock drawer and then having another gold coin one day, that’s crazy, that just can’t happen, but with bitcoin it can,” he said.
On gold, Mancini said that the yellow metal’s weakness in 2019 could have been attributed to the dollar’s strength on the back of diverging monetary policies, but should the Fed cut rates and interest rates around the world head lower in tandem, then the dollar could reverse course, creating a bullish environment.
“The real play, again, is when you have all three currencies doing poorly, so if you have the dollar, the yen, and the euro in a scenario where they’re all printing money, then the dollar should hopefully weaken and gold should do well,” he said.