Ordinary investors have largely stayed on the sidelines during gold's recent rally, and that could leave room for the price to move higher, according to veteran mining financier Frank Giustra. Speaking at the Precious Metals Summit in Colorado, he said central banks have become consistent buyers as countries reduce their reliance on the U.S. dollar.
Retail investors still absent
Giustra, founder and CEO of Vancouver-based Fiore Group, told The Northern Miner that the general public has not yet taken part in the gold market in the way he has seen through his 45 years in the industry. He described gold as “your hedge against all human stupidity.”
The absence of retail demand means the rally could have further to run, Giustra suggested, because a significant group of potential buyers has yet to enter the market.
What could trigger the next leg
Giustra said a geopolitical or financial shock could spark the next upward move in gold prices. Central banks, meanwhile, have been buying on price dips, providing a steady source of demand that supports the market even when other buyers step back.
Key takeaways
- Retail investors have largely stayed out of gold's rally, unlike previous cycles.
- Central banks continue to buy gold on price dips, providing steady demand.
- A geopolitical or financial shock could trigger the next leg higher.
- Frank Giustra has 45 years of experience in the mining and finance industry.
Common questions
Who is Frank Giustra?
Frank Giustra is a veteran mining financier and the founder and CEO of Fiore Group, based in Vancouver, Canada. He has been involved in the gold business for 45 years.
Why does Giustra think retail investors have not joined the rally?
He observed that the general public has not yet entered the gold market in the way he has seen in previous cycles during his career.
What could cause gold to rally further?
Giustra said a geopolitical or financial shock could be the catalyst for the next move higher.
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The comments come as gold continues to draw attention from central banks and institutional investors, but retail participation remains low by historical standards.