Agnico Eagle Mines CEO Sean Boyd advises savvy investors that anyone swayed by the current cryptocurrency bitcoin craze will eventually return to gold.
“Gold's a highly developed market, very liquid market, a very efficient store of value and portfolio diversifier. That's why you need to own it,” he recently told CNBC.
“It's proven itself. It's hard to believe it's going away just because of technology. People can invest in cryptocurrencies, but now's the time to own gold. If the stock market's setting record levels, I'd rather own gold than bitcoin,” said Boyd, whose Agnico Eagle Mines is a Canadian-based gold producer with operations in Canada, Finland and Mexico and exploration and development activities extending to the U.S.
“I actually think you can build a much stronger case for gold in an environment where bitcoin is drawing this kind of investor interest,” Boyd said.
“One of the things about bitcoin and the cryptocurrencies is: is there really an unlimited supply? We're gold miners. We mine deposits. I think, over time, the question will be: are these cryptocurrencies and the developers of these cryptocurrencies just mining the public?” the mining boss told CNBC.
“Our sense is that investors are starting to do their homework, revisiting the high-quality gold equities, so there is a sense that gold's about to turn here. We wouldn't be surprised to see gold between $1,400 and $1,500 within the next 18 months or so,” he said.
Angico reportedly expects gold output to grow 25 percent between now and 2020. Boyd also said that for those seeking to manage potential risk, few investments were better than gold and cryptocurrencies are definitely not among those few.
“I think gold has done exceptionally well given that we seem to be setting record highs in the stock market every week. The market will turn at some point, and it pays to be positioned properly in gold now, it will be hard to get positioned properly somewhere down the road. Gold investors will come back when uncertainty creeps back into the market,” he added.
To be sure, one of the most dramatic market developments in 2017 was the breath-taking rise of bitcoin and other cryptocurrencies. While they have pulled back at year-end, many of these digital currencies have surged in value, Reuters explained.
The U.S. dollar may lag further against its peers in 2018 as investors expected other major central banks to reduce their stimulus while the Federal Reserve has signaled it would raise interest rates further, analysts said.
“The dollar will face more headwinds in 2018,” said Chris Gaffney, President of World Markets at EverBank in St. Louis, Missouri. “The Fed won’t be going at it alone in terms of taking off more gas from the stimulus pedal.”
Meanwhile, South Korea’s government recently said it will impose additional measures to regulate speculation in cryptocurrency trading within the country, Reuters said.
“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility,” the government said in a statement.
It noted that trading prices of most virtual currencies were much higher on South Korean exchanges than they were on exchanges in other countries, although it did not provide specific examples.
The steps will include a ban on opening anonymous cryptocurrency accounts and new legislation to allow regulators to close virtual coin exchanges if needed, a measure recommended by the justice ministry, the statement said.
South Korea had previously announced its plan to tax capital gains from cryptocurrency trading to tackle what it sees as the risk of excessive speculation.
(Newsmax wire services contributed to this report).
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