Tiny but vital metal markets rush to adjust to Chinese clampdown
A bigger clampdown looks set to have far-reaching ramifications for supply chains feeding American defense and chip-making industries.
The Precious Metals Summit currently underway in Beaver Creek, Colorado, has heard how gold is poised to play an increasingly important role in a changing global geopolitical landscape.
During a keynote presentation, Incrementum AG managing partner and investment manager Ronald-Peter Stöferle said gold could be a monetary communication tool between vying blocks. It could become re-monetized because of its highly liquid nature, its lack of counterparty risk and because it’s a neutral asset.
In conversation with John Hathaway, senior portfolio manager at Sprott Asset Management, Stöferle noted how much the world had changed in the past 12 months.
“Last year, when you tried to shake hands, you were really like a brave guy. Now it’s normal again, thank God. But you know, we have a war in the middle of Europe. It’s seven 700 km from Vienna. So, it’s really there. As a result, we’re seeing the de-dollarization trend picking up momentum, which could benefit gold,” he said.
Stöferle co-authored the 2022 edition of the In Gold We Trust report, published in May, saying the world was fragmenting in real-time.
“We can see that Russia is the third largest gold producer and embracing the alliance with China, the largest gold producer and consumer. Then there was Iran which joined the Shangai Cooperation Organization, a very important organization nowadays.
“We’re seeing that the Saudis don’t pick up the phone anymore when Joe Biden calls. Those developments tell me that there’s quite a lot happening in the grand scheme of things, and I think currency reform sounds very gloomy. The reality is that if you understand monetary history, it happens every couple of decades,” explained Stöferle.
The bottom line is that in every monetary transition period past, gold played a significant role. “I just don’t see any reason why it should be different the next time, especially with those countries that are now clearly the opponent of the Western world,” said Stöferle.
