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Wednesday, December 6, 2023

Joe Cavatoni: Gold's Tactical Uses in Focus as Financial Cracks Appear

As turmoil in the banking sector continues in the US and elsewhere, Joe Cavatoni, chief market strategist, Americas, at the World Gold Council, shared his thoughts on key drivers for the yellow metal.

“Front of mind and top of mind for everyone is the tactical application of gold as a result of the financial cracks that are appearing with the banks,” he told the Investing News Network, noting that this is driving gold’s value as a safe haven.

Market participants also have questions about inflation and the outlook for the US economy, including whether the country is headed toward a recession. In Cavatoni’s view, this could very well be what happens.

“If that is the case, then that’s where gold is going to continue to play a key role more strategically as a long-term asset which performs exceptionally in a world of recessions,” he said, noting that the precious metal tends to perform well in these periods.

Cavatoni also spoke about gold demand trends, including 2022’s record buying from central banks. When asked if these entities will continue snapping gold up this year, he said the World Gold Council is watching carefully.

“Our expectation is that we’re going to continue to see some level of buying. And the reason we see that potentially playing out is the questions and concerns around the US economy, the US dollar and how diversification in a reserve portfolio might unfold,” he explained. “So is our expectation that will we see a record year like we did in 2022? We don’t know. But we don’t think that central banks will be slowing down entirely on their purchasing — so we should expect to see more.”

Watch the interview above for more from Cavatoni on gold supply and demand, plus overall market trends.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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