Erste Group gold analyst, Ronald Stoeferle, believes that the monetary aspect of gold is becoming more important as investor attitudes toward the global economy shift.
Interviewer: Geoff Candy
Posted: Wednesday , 16 Nov 2011
Posted: Wednesday , 16 Nov 2011
GEOFF CANDY: Welcome to this week's edition of Mineweb.com's Gold Weekly podcast. Joining me on the line is Ronald Stöferle- he is the gold analyst at the Erste Group. Ronald you've just come back from a massive gold conference in Munich, and its perhaps very well timed, given whats been going on in Europe - all the concerns around the debt crisis. We've seen two new prime ministers - one in Greece and one in Italy - and clearly a lot of concern about whats going on. Are you fining more people looking at gold as perhaps a way to protect their wealth?
RONALD STÖFERLE: Absolutely - first of all the conference was really big this year. Roughly its 7,000 or 8,000 people attending the conference on two days. It was slightly more than last year and I talked to Eric Sprott during the conference and he couldn't believe it was such a huge conference, and he said it was really something special - he would never have expected to be that big. From my point of view it was really interesting to see how the questions and the interesting topics of the visitors attending have changed. So normally at the end of my presentation I'm always asked "whats your long term price target? do you think that gold is in a bubble? and so on" and recently I recognised that people are asking more and more about the gold confiscation. They're asking about what the chances are for riots on the street and major wars to happen. So I think there's a pretty big shift in peoples' attitudes and their fears, so the monetary aspect of gold is getting more and more important and people don't want to make big money, they just want to preserve their purchasing power and their wealth - that was the really interesting point, I think.
GEOFF CANDY: Now the last time we spoke, we spoke about the role of gold as a currency, and clearly there is a lot of talk about its currency role, particularly given the decline in value perhaps that we've seen perhaps in things like the euro and the dollar. Clearly it's doubtful that we'll see a return to the gold standard, but do you see gold playing more of a currency role in terms of things like collateral for example?
RONALD STÖFERLE: Yes absolutely. We've seen this year that gold is accepted as collateral by JP Morgan and ICE and many other players. Gold is slowly becoming politically correct again - we've seen a lot of comments by high profile personalities talking in a positive way about gold and that's the thing that we haven't seen in the last probably two or three decades. And this monetary role - gold has been money for the last 5,000 years just with a short interruption of about 40 years since 1971. So this monetary role is getting more and more important and its regarded as a currency again, and not as a commodity. In my last report I was covering the so-called stock to flow ratio in detail and I think that's one of the main factors to understand gold, and to differentiate between commodities and monetary metals like silver and gold.... read more at source: Mineweb
