Adrian Day: 2018 Will be a Positive Year for Gold and Gold Stocks

TL;DR

Geopolitical events, inflation concerns, and weak bond and stock markets are expected to drive a positive year for gold. Copper prices are predicted to rise due to anticipated supply shortages in the future.

Transcript

I'm Nicole Rashad with investing news network and we're here in Toronto on the final day of PDAC 2018 joining me today is Adrian day of Adrian day asset management how are you today I'm fine thinking that go thank you for having me not a problem so let's just jump right in so February has been a little bit of a roller coaster for the resource secto... Read More

Key Insights

• 📈 Gold had a strong performance in 2017 and is expected to continue its upward trend in 2018 due to factors such as interest rates, inflation, and geopolitical events.
• ☠️ The Federal Reserve's rate hikes should be observed in relation to inflation, rather than their quantity.
• 🏅 Bitcoin poses a marginal threat to gold, mainly impacting the junior gold stocks market, but its effect is slight.
• 🛢️ Oil prices fluctuated due to the strengthening US dollar and excess oil supply, particularly in US shale.
• 😮 Copper prices are expected to rise in the future due to a supply shortage caused by long lead times in discovering and producing copper deposits.

Questions & Answers

Q: What factors will drive the positive outlook for gold in 2018?

Geopolitical events, interest rates, inflation, weak stock markets, and concerns over other markets are expected to contribute to a positive year for gold.

Q: Will the Federal Reserve hike rates in 2018, and how will it affect gold?

The Fed may hike rates, but the crucial factor is whether the rate hikes lag or exceed inflation. If rates lag inflation, gold will perform well.

Q: How does Bitcoin affect gold and is it a threat?

Bitcoin poses a marginal threat to gold, particularly in the junior gold stocks market. However, if Bitcoin fails as an alternative currency, money may flow back into gold.

Q: What caused the recent fluctuation in oil prices, and what can we expect in the future?

The strengthening US dollar and excess supply of oil, especially in US shale, caused the recent fluctuation. Oil prices are expected to remain range-bound and may reach $70 per barrel, but not exceed $100 in the near term.

Q: Why is copper expected to perform well in the future?

Copper is facing an anticipated supply shortage due to the long lead time in discovering and producing copper deposits. Increasing demand from China's growth and battery demand also contribute to its positive outlook.

Summary & Key Takeaways

• Gold had a positive performance in 2017 and is expected to continue its upward trend in 2018 due to factors such as interest rates, inflation, and geopolitical events.

• The Federal Reserve may hike rates, but the important factor is whether the rate hikes lag or exceed inflation, which will determine gold's performance.

• Bitcoin poses a marginal threat to gold but could potentially benefit gold if it fails as an alternative currency.

• Oil prices fluctuated due to the strengthening US dollar, but are expected to remain range-bound due to an excess supply of oil, particularly in US shale.

• Copper prices are promising due to an anticipated supply shortage caused by the long lead time of copper deposits and increasing demand, especially from China's growth and battery demand.