(Kitco News) - There is a major global shift coming to the gold market, and it will help lift prices higher, according to Frank Giustra, CEO of the Fiore Group.
Giustra spoke to Kitco Senior Mining Editor and Anchor Paul Harris on the sidelines of the Future Minerals Forum about how fractional, blockchain-based gold could attract the TikTok Generation, transform gold prices, and revolutionize the future of precious metals.
“I had a recent conversation with David Tait, the president of the World Gold Council,” Giustra said. “They've been at it for five years – working with the 20 biggest bullion banks. What they're projecting now is that 2025 will be the year of laying the infrastructure because it's all going to be connected through fiber optics. And then it will be launched in 2026 as digital gold.”
This digital form of gold will be divisible and immediately transferable, making it more accessible to tech-savvy investors.
In order to bring in the younger generation into the gold market, you have to make it technologically convenient, Giustra noted. On top of that, the impact of commercial banks getting involved will be significant.
“Although gold is a tier-one asset with the Bank of International Settlements, it's not with commercial banks,” Giustra stated. “If commercial banks want to use gold as collateral, they get discounted by 85 percent to the value, which means they only get 15 percent of the value for collateral. The banks are going to love this because they're going to be able to have their gold positions as collateral as with any other tier-one asset like Treasury bills. It's going to make gold much more attractive to the world at large.”
Giustra believes that these changes will make gold more attractive globally, and even without the digital component, gold will rise in price due to continued central bank purchases and a de-dollarization movement.
The mining legend also touched on how companies need to modernize their marketing strategies, taking cues from the crypto sector's approach. "The gold mining industry, or the mining industry in general, is still living in the past," he said emphasizing the need for innovation in attracting younger investors.
Turning to silver, Giustra acknowledged that it has different market dynamics than gold, being more influenced by commercial factors such as solar panel demand. Unlike gold, silver's price is not yet dictated by the East. He predicts that silver prices will follow gold's upward trend and potentially outperform gold in an explosive bull market.
Giustra expressed concerns about the state of Canada's mining industry, noting a lack of capital and a challenging regulatory environment. He contrasted this with the strategic, long-term approach of state-backed entities in the East.
"Canada was the leader in global mining finance...it's no longer, and that's got a lot to do with Canadian policies and just a terrible environment in Canada for the mining industry," he said. "Canadian juniors, which represented half of the global mining companies in the world, are starved for capital."
He emphasized the need for policy changes in Canada, such as shorter permitting timelines and more infrastructure development.
Giustra also discussed potential changes in the Canadian government, expressing hope that a more conservative government would bring policies that improve the resource sector.
Special thanks to our Future Minerals Forum sponsor for making this coverage possible. Visit https://www.futuremineralsforum.com/ today.
