(Kitco News) - The macro picture is shifting and that means a higher gold price, said Brien Lundin, editor of the Gold Newsletter.
In mid-January Lundin spoke to Kitco Mining at the Metals Investors Forum Vancouver 2024.
“We are going to have a pivot. We are switching from a rate-hiking cycle to a rate-cutting cycle. That’s huge,” he said, adding: “We're going from headwinds where gold did very well, set all-time highs, and now we're going into a period where it's going to have really tremendous tailwinds.”
Lundin said $2,100 per ounce will be an important level for the gold price to reach.
“I think that's enough to prove to general investors that there is a trend here, that's sustained, and at that point we're going to see more money come in.” However, Lundin noted that “the Western investor is not involved in this market yet,” arguing that when they do start buying, “they're going to send the price higher and they're going to follow that [ETF buying] trend to I think much higher levels.”
Lundin is bullish on copper, partly because there are no substitutes for it in the battery metals matrix. Also, it takes 10 to 15 years to advance a copper deposit to production and there has been a dearth of exploration capital spent over the last decade and a half.
“There is a supply crunch that is inescapable,” he said. “If you took out the whole electrification trend, you would still face a copper supply deficit over the coming years just on a base-case scenario. You add that electrification in, and you're going to need much more copper than we have today.”
Lundin sees a role for the juniors in alleviating that supply deficit.
“A lot of these deposits that are known, that are controlled by junior mining companies, large scale, haven't been developed for some reason or another and there may be 40 or 50 of those around the world. They would all need to be developed and in production to even come close to meeting the copper demands that are facing us, so it's a very exciting area.”
Asked about the U.S. election year, Lundin said that either winner will have to face high debt levels and will need to lower interest rate policies, which will favor hard assets, like gold.
Lundin's New Orleans Investment Conference will be celebrating its 50th year. Lundin says special guests are scheduled.