We continue to see value in gold despite the recent volatility which was caused by market technical factors. The fundamental underpinnings of the long gold trade remain intact. Since physical gold is rarely consumed but rather held for years as a store of value, it has more in common with fiat currencies than industrial metals. This is why the direction of gold prices is influenced by factors that drive other currencies including growth outlook and interest rates rather than physical premium, inventory levels and other important technical drivers of certain commodities. As such, correlation with other metals, such as the current sharp correction in palladium prices caused by supply & demand distortions, is likely to be fleeting when gold returns to its fundamental drivers.
As a Store of Value, golds’ biggest attraction is that it maintains or even appreciates in value consistently and acts as safe-haven during market risk-off periods. Because of gold’s perception, it is not evaluated in terms of dividend yields and cash flow distributions, but instead by analyzing quantifiable macro factors related to world growth prospects, liquidity (interest rates, USD), with an overlay analysis of the market environment. Implementing gold in portfolio construction requires combining bottom-up quantitative signals with a forward-looking analysis of event risks and political uncertainty. Broadly speaking, the Gold investment framework is constructed based on three pillars.
Panthera Resources Plc (LON:PAT) was incorporated in the UK and Wales in 2017. The company is focused on its gold exploration and development projects in India and West Africa and the optimisation of other mineral projects.
