Gold Markets Remain Constructive: Dambisa Moyo

Although gold prices dropped 23% in the second quarter, the appetite for gold still remains, said international economist Dambisa Moyo.

Moyo said that she is still constructive about the gold markets. Several factors are structurally creating a natural floor in gold prices and will continue to provide support, she added.

“There is a lot of momentum behind the sentiment that there is not going to be a structural or fundamental demand for gold. I do not subscribe to that view,” she said.

Looking further into the gold market, Moyo said there are two factors that will provide support to gold prices. The first factor she highlighted is that gold is being viewed as a currency rather than a commodity. In fact, central banks account for a significant portion of gold demand, she added.

“Gold becomes a natural destination for many players in the currency markets but also many retail players who are interested in having some sort of security in the currency space,” she said.

The changing supply and demand dynamics for gold is the second factor, she said. Emerging markets predominantly in Asia remain in the lead in terms of gold demand, Moyo added. Not only is gold culturally important in countries like India, the uses of the precious metal is evolving.