Page 34 - Bullion World Volume 3 Issue 2 February 2023

annualized net compound returns covering precious metals and amplified economic uncertainty
of +37.59% (as of 31 December critical metals, which cannot be and negative growth patterns,
2022). covered here but we are always which have led to increased
open to discuss these with clients. demand for precious metals as
Besides gold, where do you a safe haven asset.
advise investing in other What, according to you, are the • Global sovereign Central
precious metal space? major structural changes that Banks around the world have
Throughout the year and more are going around in the precious been net buying gold every
importantly over the major cycle metals space? year since 2010 into 2022, the
time frames, each metal offers Again this is a big question that greatest central bank buying
unique pricing opportunities or has many strong roots in place and spree since the 1960’s. 2022
anomalies, of which the vast growing stronger, there have been saw the greatest net officially
majority of the market simply several structural changes in the reported buying spree of
outright ignores. The industrial precious metals space in recent the last 13 years. Un-official
end users rely on market research years, including: procurement raises their net
from various agencies to plan their buying dramatically.
procurement plans, but that’s as • Increased demand • The global debt crisis is
far as it goes in the precious metal for sustainable and growing rapidly as Central
space. environmentally friendly mining Banks start to raise interest
practices, leading to a shift rates expeditiously in the face
For example, platinum today towards more responsible of the worse negative nominal
is offering investors a huge sourcing and production interest rate yield picture since
opportunity to benefit from a methods, which in turn is World War 1. Higher rates
wholly differing structure versus tightening supply and raising increase the serviceability
the last 10 years or so of its price costs of production. costs of existing debt thereby
action, focusing on the global • Growth in the use of precious increasing the demand for debt
supply-demand picture. It’s an metals in industries such as over and above the already
extensive situation change and electronics, renewable energy, expanding debt growth. Then
best phrased as a ‘perfect storm’ electric vehicles, hydrogen we have the stagflationary
with falling ore grades, disruptive economy, pollution controls economic environment
and falling global production, rising and the rising technology backdrop that invariably forces
cost of production at a time of loadings requiring greater governments to increase
rapidly rising industrial demand. amounts of platinum group spending. Thereby leading
Much of this demand is linked to metals are all driving up us into a condition that the
global changes as a result of ever- industrial demand for these global monetary debasement is
increasing pollution controls as well metals significantly. quickening its pace.
as new energy sources including • The introduction of new
the hydrogen economy. Above technologies such as Overall, these changes are leading
ground liquid available stockpiles blockchain and digital crypto to a more dynamic and rapidly
have been decimated over the last tokens, which have led to a evolving precious metals market,
10 plus years by China importing growing interest in precious with very attractive new investment
enormous amounts of platinum metals as a store of value and opportunities across this greater
from the market-place for its own as a diversification. super-cycle that we are now in.
tactical sovereign holdings. • Growing geopolitical tensions,
There a quite a few opportunities war and civil unrest along with