Gold Should Be More Like Cryptocurrency, Says Barrick Gold COO—The Ledger
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I was in Toronto yesterday for Fortune’s Most Powerful Women International Summit, where I had the opportunity to moderate a panel featuring the female C-Suite executives of major global companies including Barrick Gold, the Canada-based gold mining company.
Naturally I had to ask the gold mining exec about, well, what we at The Ledger often call digital gold. And Catherine Raw, the North America COO of Barrick Gold, was ready with an answer—but she warned me off the bat that her position is a bit contrarian even inside her company, as well as the rest of the world. First, though, she offered a defense of her asset class that is perhaps the best argument I’ve heard for gold over cryptocurrency (and that includes the epic Bitcoin vs. Gold debate I presided over in Vegas a few months ago).
“I do not think cryptocurrencies are a competitor to gold,” Raw said. “The very tangible nature of gold is what keeps a special place for it. So it will always have value, whatever the price is, I don’t know, but it will not be zero. Whereas cryptocurrency could be zero—that’s the difference.”
After all, as long as people wear jewelry, this metal will still be somewhat precious, as it has been for thousands of years. Digital currencies, though? Their inherent value is at the very least debatable.
But here’s where Raw’s point of view diverges from her industry’s. Referencing the lasting legacy of the Internet in the wake of the dot-com bubble, she said she feels the same way about crypto: “The phenomenon of cryptocurrency is here to stay.”
And she sees that as an opportunity. “What I would like is actually to see gold harness that,” she said. “I think the gold industry has got its head in the sand by not taking advantage of a changing demographic.”
In other words, she sees promise in trying to win back the millennial generation between the ages of 20 and 40 who these days are more attracted to cryptocurrency than they are to gold. Currently, the main contingents still actually buying gold include the Indian and Chinese markets, institutions and central banks, and “old fogies who are buying it because they’re scared of the world,” she said.
“My ambition over time is actually to see how as a gold industry we can harness that younger demographic,” she added.
As for the price of gold—which currently trades at about $1,500 an ounce, up more than 25% from a year ago— she’s bullish. Geopolitical events that the rest of the world interprets as negative for markets are often good for gold: Brexit, along with the wave of anti-EU sentiment sweeping through Europe, “means the euro is not an investable currency,” said Raw, a British native herself who left the country shortly before the U.K. referendum (and who says Brexit has made her less inclined to move back). “For us any currency that’s not investable is good for gold, because it’s one less thing that central banks buy.”
Taken together, “It really makes us a little more sure that the gold price is well supported, if not at $1,500, definitely at $1,300,” she said. “It means that you can see a runway of about five years at least where you can get your returns.”
Jen Wieczner | @jenwieczner | email@example.com
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