Professional investors including pension funds, private equity and venture capital firms, family offices and sovereign wealth funds are set to boost allocations to gold and gold miners over the next 18 months as the metal’s price rises.
This is according to new research by Tresor Gold, a data driven gold mining company developing exploration and mining projects in Sierra Leone.
Its international study with professional investors found 93% expect exposure to direct investment in gold and gold miners to increase over the next 18 months with 9% predicting dramatic increases.
They believe the rally in the price of gold will be sustained in the year ahead and point to growing concern about a global banking crisis as the key reason for increased allocations to the gold and gold mining sector, the study for Tresor Gold with investors in Canada, Australia, the United States, United Kingdom, United Arab Emirates, France, Germany, Switzerland, Qatar and Saudi Arabia found.
Almost all (96%) questioned at sovereign wealth funds, pension funds, private equity funds, venture capital funds and family offices responsible for US$307,5 billion assets under management believe the price of gold will be higher at the end of this year compared with the end of 2022.
More than six out of 10 (61%) predict the price of gold will be 5% or more higher at the end of 2023 compared with last year with 70% predicting the price will be more than US$2150 compared with around US$2000 when the research was carried out. Around 15% say the price will exceed US$2500.
The key reason for increased allocations to gold and gold miners is growing concern about an international banking crisis. Around three-quarters (76%) cited that as one of their top four reasons for boosting allocations.
Around 70% pointed to the belief that the Federal Reserve is set to pause rate rises while 61% cited fears of a global recession and 60% gold’s role as a hedge against inflation among their top four reasons for increasing allocations.
The research found that 60% of the investors believe that gold and gold mining stocks should make up 6% or higher of core holdings by professional investors.
Tony Lawson, chief executive officer, Tresor Gold said: “The recent rally in gold prices is expected to continue in the medium term, as various investors such as sovereign wealth funds, pension funds, private equity and venture capital firms, as well as family offices, are increasing their allocations due to price optimism.
“This surge in demand for gold is a response to growing concerns about a potential global banking crisis, emphasising the traditional role of gold and gold mining as a safe haven against inflation and recession fears."
Currently Tresor Gold is raising capital to scale its Sierra Leone-based gold projects located in the country’s two largest greenstone belts — Sula Mountains and Nimini Hills Mountains — adjacent to projects with over one million oz.
Tresor Gold’s diverse, inclusive management team, has more than 100 years of collective industry experience and proven track records across every crucial vertical of the gold industry including exploration and development as well as funding and hedging production.
The company is committed to sustainable and positive impact in its communities and it aligns its ESG principles with UN Sustainable Development Goals. For more information go to www.tresorgoldcorp.com.