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Trump, bitcoin to dominate precious metals talks: Mines and Money summit

London (Platts)--30 Nov 2017 518 pm EST/2218 GMT


US President Donald Trump, the cryptocurrency Bitcoin, and their relevant impacts on both the gold and silver prices this year and outwards to 2018, were the main points of discussion as the annual Mines and Money exhibition drew to a close Thursday.

The election of Trump has supported gold prices this year due to increased political risk, investors and analysts at the summit agreed.

"We have seen a disconnection between interest rates and gold price movements this year, with both higher expected [core] rates and a rise in the gold price in the second half of 2017," Simona Gambarini of Capital Economics told the audience. "This has happened on the back of heightened geopolitical uncertainty."

Trump's announced fiscal stimulus in the US will likely turn out considerably smaller than planned at $1.5 trillion instead of $4 trillion, while no major infrastructure spending is expected, which will limit downward pressure on the gold price, she added.

Bitcoin, the most recognized of all the cryptocurrencies, has ballooned 1000% over the past 12 months, and as such was widely addressed by commentators and a panelist. Many compared it to bullion as it shares characteristics, chiefly functioning as an inflation-hedge, largely outside of governmental controls.

Bitcoin's sharp rise the last year is a net positive signal for gold, investors agreed.

"The same millennials that are now so invested in Bitcoin, might be interested in gold too," Ellis Martin, CEO of the Ellis Report said Thursday. In order to meet younger investors' preferences, the gold investment industry itself will become digitized -- backed by blockchain, the technology supporting cryptocurrencies, said Peter Grosskopf, CEO of Sprott Asset Management. Projects like Royalmint's RMG, Paxos and TradeWind Markets already building a presence in this space, he added.

The bullion market appeared to be being pulled into the digital age at the 2017 LBMA/LPPM conference in Barcelona back in October, with a key talking point being cryptocurrencies and their implications for gold trade going forward.Even the most traditional of industry players have been taking note of digital currencies, which have become much used buzzwords.

During a panel discussion, Frank Holmes, CEO of US Global Investors, addressed the idea that cryptocurrencies -- those backed by a digital fingerprint -- will be a key component of the global economic landscape in coming years.

"There is something big happening [in cryptocurrencies]," he said.

There was a lot of chat about the partnership between the CME and the Royal Mint, allowing investors to trade a form of cryptocurrency fully-backed by Royal Mint-vaulted, allocated gold.

--Pascal Dick, pascal.dick@spglobal.com

--Ben Kilbey, ben.kilbey@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com




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