Gold still has lots of runway – by Peter Marrone (Yamana Gold Blog – June 19, 2020)

Peter Marrone is the Executive Chairman of Yamana Gold.

Several notable people in the gold mining industry have told me over the years that anyone who claims they can predict the price of gold are either fools or liars. I generally agree, but with the utmost respect there are some nuances that need to be considered.

You can predict direction, you can certainly predict indications, and there are times when you can be bold and say, ‘This is where I think gold is going to go.’

Which brings me to the subject of this blog. Gold is trading at $1,731 per ounce, up 29% in the past 12 months, including 14% this year. Can it hold at these levels and is there more room to run? I believe the answer is yes.

Even before the COVID-19 pandemic hit, many of the factors positively affecting the price of gold were in place: low interest rates globally, elevated debt levels, easing monetary policies, central bank buying, ongoing trade tensions between the U.S. and China, and mass economic protests in many countries around the world.

COVID-19 has punctuated and accelerated what was already happening, and one cannot ignore the potential impact on gold prices. Since the pandemic began, central banks have been expanding their balance sheets at astounding rates. In March, the U.S. Federal Reserve launched an unlimited quantitative easing program.

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