As commodities and assets navigate an uncertain market, Scottsdale Mint CEO and owner Josh Phair says gold has become a trustless asset that attracts people in times like these.
“I don’t think people trust the government issued data from any nation, they don’t trust each other in trade and what’s going on. They’re going to a trustless asset and I don’t think we’ve seen this before,” he told MINING.COM host Devan Murugan on the latest Top of Mine episode.
Phair argues that this shift comes as he notices buying patterns changing.
“I would say very well-healed investors, even businesses are putting gold on their balance sheets and then they’re lending against it,” he said. “China has been a buyer for 22 consecutive months and they bought a lot on this dip. And so I think it’s driven primarily by the central banks. The ones that have zero to very little are looking at 1 to 3% allocation in the gold. The ones that have 1 to 3% allocation are looking at 5% to 7%. And then we have Poland who’s shooting for the upper 30% by the end of the year.”
Metal markets are always going to ping-pong around, but now it is even greater, according to Phair.
“I see it as the volatility is growing in gold and silver, and gold is being used as a treasury asset now,” he said. “We’ve seen, I would say, decades of periods of time where metal does not move at all. Now, we’re seeing it in an hour.”
Mining’s bottleneck
Phair argues that the biggest obstacle for mining today is refining, causing mining investment to spread more globally.
“We could say that while the mining sector’s had a nice cash flow it’s been underfunded, underdeveloped, underexplored for over 20 years,” he said.
For Phair, that is why so many mining projects are being consolidated and mining companies continue to grow. However, region-specific challenges affect production.
“It’s hard to mine even in places like the United States, it gets a little trickier depending on which administration’s in charge for reclamation bonding, getting your permitting done, that process can take 10-20 years,” he said. “So, you’re having to go to tougher places, so now you’re talking South America, you’re talking Africa. And then you’ve got geopolitical risk.”
Watch the full episode here:
Source: https://www.mining.com/people-are-turning-to-a-trustless-asset-phair-says/
