In a recent interview with Sprott Money, gold market expert Ronnie Stoeferle, Managing Partner at Incrementum AG, shared valuable insights on the current state of the gold market. Stoeferle, renowned for his influential “In Gold We Trust” report, emphasized the growing role of central bank purchases, particularly from emerging markets, as a driving force behind gold’s rising prices.
Stoeferle pointed out that the surge in demand from emerging market central banks, coupled with private consumption from these regions, has become a significant factor in shifting the dynamics of the gold market. “Emerging market demand, from central banks and private investors, is really moving the needle, making them the marginal players in the market,” he stated during the interview.
While acknowledging gold’s impressive performance, especially against major currencies, Stoeferle suggested that the market might be entering a phase of short-term consolidation. He cautioned, “I wouldn’t expect too much from gold over the next couple of weeks, to be honest,” adding that there’s substantial buying power waiting on the sidelines.
Nevertheless, Stoeferle remains optimistic about gold’s long-term prospects. He believes that a resurgence of Western investment demand, coupled with a potential shift away from traditional bond investments, could drive prices higher. “The main secular case for gold is the flow of capital from the bond market into the gold market,” he said. “If bonds are the benchmark, then gold is actually not in a bull market, but in a super bull market.”
Despite gold’s strong price performance, Stoeferle noted that the mining sector has not kept pace. He attributed the underperformance of major mining companies like Barrick Gold and Newmont to a lack of strong results. For institutional investors to show interest, he stressed that these companies need to demonstrate improved performance and operational strength. “If these companies can turn things around—and from a technical point of view, the charts look interesting—it could attract generalist investors,” he explained.
While the mining sector faces challenges, Stoeferle remains bullish on both gold and silver in the long term. He anticipates a potential surge in silver prices as investor interest in the precious metal grows, viewing silver as a key area to watch in the coming years.
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