Albert interviewed by Andre Dubuc of Montreal’s French newspaper, La Presse.
ENGLISH TRANSLATION
Gold has had a prosperous year
(New Orleans) The yellow metal has just had a fantastic year and a price of $3000 US per ounce is within reach. The future looks bright, according to experts met at the conference, although a correction cannot be ruled out for 2025.
André Dubuc, La Presse
What a year it has been! As of November 30, gold is up 28% in 2024, when denominated in US dollars. In Justin Trudeau dollars, it’s even better, the value of the precious metal has gained 36%.
“After the surge we’ve seen this year, it wouldn’t be surprising if gold calms down in 2025,” concedes Albert Lu, founder and president of Luma Financial, a California investment firm. He acted as master of ceremonies at the conference. In the short term, according to him, everything will depend on the strength of the greenback, which has been reinvigorated since Donald Trump’s election, and 10-year bond yields.
Usually, a strong US dollar and high real interest rates tend to weigh on the price of the precious metal.
Mr. Lu further points out that a quick peace in Ukraine and a de-escalation of tensions in the Middle East leading to savings on military spending could temporarily weigh down the price of gold.
“In exchange for peace, Trump could also obtain from Putin a slowdown in the de-dollarization of emerging economies [BRICS, for Brazil, Russia, India, China and South Africa],” he hypothesizes.
This McGill University engineering graduate nevertheless remains in the optimistic camp in the long term.
« Gold has had an incredible journey for over 20 years. The reason is the perpetual deficit, growing debt and the government’s reluctance to tackle the problem head-on: reducing spending, increasing taxes, balancing the books.»
-Albert Lu, founder and president of California investment firm Luma Financial
“Gold is increasing because the purchasing power of the dollar is decreasing,” continues Mr. Lu in an interview. “Nothing [Donald Trump] will do will solve this problem in the next year or even in four years. The problem is much bigger than him. The long-term trend for gold, at least for the next decade, is still upward.”
Guest speaker at the event, Avi Gilburt, founder of ElliottWaveTrader.net, a live trading room and member forum focused on technical analysis, is another advocate of moderation. The prevailing sentiment in the markets leads him to anticipate a slight correction in 2025 before the price of gold experiences a final push in 2026, which should bring the ounce of gold to around $3300-3400 US. And then, it will be time to sell, he argued at the microphone in front of about 600 people.
Two other experts La Presse spoke to are less categorical and generally more optimistic despite the momentary decline that gold recorded following the Republican sweep.
“Investors reacted in the heat of the moment and the mood was risk-taking. Safe-haven assets like gold and US bonds retreated,” explains Lobo Tiggre, also known as Louis James, author of the financial newsletter The Independent Speculator, in an interview.
On October 30, gold peaked at 2,888 US, before starting a slide to 2,564 US on November 15. Since then, it rose to 2,716 US on November 22 before falling back below
2,650 US.
“As gold outpaces inflation and is not correlated with it, I think that when investors start to realize how inflationary Trump’s program is, gold will start rising again,” says Lobo Tiggre.
“Gold generally does well when people are concerned about maintaining the purchasing power of their hard-earned savings,” notes Rick Rule, a renowned investor who is currently working on launching the virtual bank Battle Bank, which will offer loans to individuals using their gold bullion stored securely with a recognized third party as collateral.
“In your country as in mine, where public debt is an issue,” he specifies in an interview, “these concerns exist. We’re going to have a hard time servicing these debts other than by repaying them with devalued dollars. In these circumstances, gold does very well.”
He doubts Trump’s success in limiting spending. “The idea of creating a government agency to reduce the size of government agencies and departments seems ironic on its face,” he says, referring to the agency led by Elon Musk on government efficiency.
In his view, Western investors will continue in 2025 to value upwards the growing profit margins of the best gold stocks, a phenomenon that has been observed for two quarters, according to him.
Major producers such as Alamos (symbol AEG, in Toronto), Agnico Eagle (AEM) and Lundin Gold (LUG) have gained between 50 and 100% in 2024. On the other hand, Newmont (NGT) and Barrick (ABX), with modest gains of 2 and 7% respectively, have disappointed expectations due to rising operating costs.
“Investors who made wise choices had an excellent year,” confirms Lobo Tiggre, who lives in San Juan, Puerto Rico, a territory associated with the United States. Even though he sees gold on the rise, his preferred choice for next year is the red metal that is at the heart of the energy transition. “The chances of copper going from $4 to $6 US per pound are very real, while the possibilities of gold appreciating by 50% in 2025 seem slimmer to me.”
-end of the first article –
What is the New Orleans Investment Conference?
Founded in 1974 by businessman Jim Blanchard, a gold seller, the conference wanted to echo the movement in favor of legalizing gold possession for citizens, a practice then prohibited in the United States since 1933. President Ford relented in 1974. The conference has continued thereafter to promote a strong currency, protected from devaluations caused by governments. Margaret Thatcher, Henry Kissinger, Milton Friedman and writer Ayn Rand have spoken there. At the height of its popularity, the conference organized regional events, one of which was held in Montreal in 1980. Its current organizer, Brien Lundin, claims for gold the status of legal tender currency — thus, it would not be subject to capital gains tax in case of sale. This is already a reality in nine states, including Utah, Texas and Wyoming.
– La Presse
Second article
Bitcoin overshadows the precious metal
(New Orleans) Bitcoin stole the show during the four-day event. Its price kept climbing to approach $100,000 US, a historic threshold that the cryptocurrency briefly surpassed on Thursday.
André Dubuc, La Presse
During his campaign, Trump made promises to crypto investors in exchange for contributions to his election fund. He promised favorable regulations and the creation of a strategic bitcoin reserve. His election has enthused cryptocurrency promoters.
Gold supporters are divided regarding bitcoin: a camp led by financier Peter Schiff rejects it, crying Ponzi scheme; the other recognizes its real value stemming from the strength of its network. The latter was defended among others by James Lavish, associate director of the Bitcoin Opportunity Fund. At the conference, about half of the participants indicated they owned some when a speaker asked the question.
Beyond the arguments of both sides, could it be that bitcoin is dethroning gold for investors looking for an inflation-resistant monetary value, especially those of the rising generation?
Retired from Sprott Inc. since 2021, Rick Rule remains an active investor. The popularity of bitcoin doesn’t worry him unduly. According to him, the public interested in mines and metals is changing: fewer white men, but more women and a keen interest in the population of Asian and Middle Eastern origin, even among young adults. “In my database of 90,000 names, the vast majority of newcomers are under 50 years old.”
As for bitcoin, Rick Rule says he’s indifferent. “I’m intellectually curious about bitcoin because I like the idea that there’s an independent currency that the government has no influence over. It makes me laugh, but it’s not enough for me to buy something I don’t understand.”
Albert Lu has a different perspective. “With the creation of ETFs [exchange-traded funds], bitcoin has already become an alternative to gold as a speculative vehicle, especially for those 40 and under,” he acknowledges. “It’s enough to sell gold bullion ETFs and replace them with bitcoin ETFs and it’s done,” he gives as an example.
Albert Lu notes the extraordinary rise of bitcoin over the past 15 years, but the future remains uncertain, according to him. “Comparing gold and its 2600-year history to bitcoin is like comparing Connor Bedard to Maurice Richard: one season doesn’t make a career.”
-End of the second article-