World Gold Council Holds Investment Summit with NYU Stern Business School
The Investment Summit considered major shifts in relation to the long-term investment landscape and explored how they could be addressed.
‘Attendees included leading industry experts, asset owners, academics, official institutions from around the world and central banks. Many participants had no prior involvement in the gold investment markets, therefore their insights were of particular interest. The debate centred on the macro socio-economic changes ahead. These included: the shift in economic power from West to East, the rise of fintech and cryptoassets, and environmental, social and governance issues, and their implications for the gold market and investment. It also addressed the impact of rising emerging-market incomes and equally, the widening deficit in pension funds in western markets. The macro-economic shift from a primarily dollar-based to a multi-currency based reserve system was also considered. We will continue to host the global gathering of thought leaders and decision makers to raise the conversation on gold and its relevance to investors and society at large. After all, gold is the constant of value, mitigating financial risks and providing enhanced financial security,’ said Aram Shishmanian, Chief Executive Officer, World Gold Council.
• Macro-economic prospects for the US and China;
• Global investment challenges;
• The evolution of responsible investing;
• Crypto-assets and blockchain;
• The long-term global economic outlook and the likely direction for gold over the next 30 years.
Dr Alan Greenspan, pre-eminent former Chairman of the US Federal Reserve, provided valuable insight into current socio-economic conditions and the challenges they create.
Economic power is shifting from West to East. China is maturing as an economy. Domestic and consumer expenditure is rising and financial reform is underway.
Over time, China will almost certainly become the number one global superpower, followed closely by India. At the same time, the US faces several long-term challenges, including soaring debt, rising inequality, an ageing demographic and a slump in productivity. Many of these challenges are faced by European nations too, where populations are ageing even faster than in the US. As China becomes stronger and the Western world grapples to address socio-economic issues, persistent tensions on the world stage are possible. Shifts in strength and influence are likely to affect the US dollar’s status as the premier reserve currency, inciting a move to a multicurrency reserve system.
Geo-political tensions, market volatility, persistently low bond yields and ageing populations impose exceptional pressure on investors. In their search for long-term sustainable returns, many turn to alternative or unconventional asset classes. Asset managers too face increasing pressure.
Whilst investors who care about environmental, social and governance (ESG) issues may not currently possess in depth understanding, as the field matures, they may use their position to drive long-term positive change within the companies they own. Most asset managers remain sceptical about cryptoassets, as exemplified by the history of bitcoin. Despite its spectacular return, bitcoin and its peers are highly volatile. But the blockchain technology that supports these digital currencies should not be ignored. Over time, it is likely to deliver significant social and corporate value.