Gold price might have reached bottom – speakers

Otmane El Rhazi from The Bullion Desk.

The gold price might have bottomed out and faces a brighter future, with the metal’s long-term fundamentals supportive, speakers at the 121 Mining Investment Conference here said.

“The gold price has been fluctuating around $1,200 per ounce for over two years now and pretty soon we might see a rebound in prices,” Angelos Damaskos, CEO of Sector Investment Managers, said.

Spot gold was last at $1,197/1,198 per ounce, down $6.70 on Friday’s close, having traded below $1,150 in March this year.

Risks in the global economy should continue to provide direction to the gold market given the metal’s traditional safe-haven qualities.

“Potential instability in the eurozone, the Russian-Ukrainian conflict, the Middle East – those are the black swans that can fly in at any moment,” Damaskos said.

Greece is making headline again – the country has yet to provide the list of comprehensive reforms that could secure it crucial funding and avert a default.

The country needs $2.16 billion to pay public sector wages this month though it must also pay back the IMF on 12 May around 1 billion euros.

Any further signs that a deal might not being reached at a meeting of Eurozone finance ministers this week will raise the prospect of a Greek exit – or ‘Grexit’ from the bloc.

Gold’s long-term fundamentals look constructive, speakers agreed.

“If not the bottom, we are pretty close to the bottom and we should see prices rebounding soon,” Damaskos said.

Asian demand is robust and is enough to support the market; this, the oil price and currency movements will be the main drivers for the gold price in 2015, speakers said.

Similarly, silver’s fundamentals look supportive – stocks are very low and there will be supply shortages soon followed by higher prices, Willem Middelkoop, founder of Commodity Discovery Fund, said.There will be physical silver shortages by 2020, he estimated.

“Silver is gold on steroids – it waits for the gold price to grow and then it grows even faster,” he added.

Silver was last at $16.07/16.12 per ounce, down 17 cents.

With supply constraints and physical shortages coming soon, silver is set for a rapid rebound, speakers said.

(Editing by Mark Shaw)

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