The bullion market appeared to be being pulled into the digital age at the 2017 LBMA/LPPM conference in Barcelona Monday, with a key talking point being cryptocurrencies and their implications for gold trade going forward. Even the most traditional of industry players have been taking note of digital currencies, which have been buzzwords.
During a panel discussion, Frank Holmes, CEO of US Global Investors, addressed the idea that cryptocurrencies -- those backed by a digital fingerprint -- will be a key component of the global economic landscape in coming years. "There is something big happening [in cryptos]," he said.
There was a lot of chat about the partnership between the CME and the Royal Mint, allowing investors to trade a form of cryptocurrency fully-backed by Royal Mint-vaulted, allocated gold.
The trade platform is in the early stages of adaptation, but sources close to the situation said that, going forward, the offering had the potential to give crypto-skeptic investors easy and secure access to the market, backed by the RMG brand.
Holmes told the audience he saw great potential for the exchange-traded product.
There was, of course, substantial push back on cryptocurrencies from certain camps, which is potentially inhibiting money flows into the sector.
The decline of the tradition physical gold market was another key talking point at the event, with some delegates saying products such as RMG were a gateway to gold for a new era or buyers -- tech savvy and wary of holding physical material.
The technology also brings down costs in a market where margins are shrinking across the value chain.
Jeremy Gatto, portfolio manager at Unigestion, summed up one reason for not investing in the overall sector -- understanding about exactly what people were investing in, but he did not rule out future interest as the industry continues to grow, as well as the wider understanding of it.
