Dubai, UAE – Professional investors from various regions have expressed their intentions to boost allocations to gold and gold miners over the next 18 months, according to a latest global study conducted in Canada, Australia, the US, UK, UAE, France, Germany, Switzerland, Qatar, and Saudi Arabia.
The study conducted by Tresor Gold, a data-driven gold mining company, revealed that 93 percent of investors expect exposure to direct investment in gold and gold miners to increase, with 9 percent anticipating dramatic increases.
The research findings indicated that investors believe the rally in the price of gold will continue in the coming year.
A key reason for the increased allocations is the growing concern about a potential global banking crisis. Sovereign wealth funds, pension funds, private equity funds, venture capital funds, and family offices responsible for $307.5 billion in assets under management participated in the study.
Almost all respondents (96 percent) believed that the price of gold will be higher at the end of this year compared to the end of 2022.
More than 60 percent predicted that the price of gold will be 5 percent or more higher at the end of 2023 compared to last year, with 70 percent expecting the price to exceed $2,150, surpassing the value at the time of the research. Approximately 15 percent of participants predicted that the price will even exceed $2,500.
The study identified the key reasons behind the increased allocations to gold and gold miners. Around 76 percent of respondents cited growing concern about an international banking crisis as one of their top four reasons for boosting allocations.
Additionally, 70 percent pointed to the belief that the Federal Reserve will pause rate hikes, while 61 percent expressed fears of a global recession, and 60 percent highlighted gold’s role as a hedge against inflation.
According to the research, 60 percent of investors believed that gold and gold mining stocks should make up 6 percent or higher of core holdings by professional investors. The demand for gold is driven by price optimism and the perception of gold as a safe haven against inflation and recession fears.
“The recent rally in gold prices is expected to continue in the medium term, as various investors such as sovereign wealth funds, pension funds, private equity and venture capital firms, as well as family offices, are increasing their allocations due to price optimism,” said Tresor Gold CEO Tony Lawson.
Tresor Gold is currently raising capital to scale its gold projects located in Sierra Leone’s Sula Mountains and Nimini Hills Mountains, which are adjacent to projects with over one million ounces of gold. The company boasts a diverse and inclusive management team with over 100 years of collective industry experience, covering exploration, development, funding, and hedging production.