This year marked the 30th anniversary of the Denver Gold Forum (DGF), the world’s most prestigious precious metal equities investment conference. The invitation-only event, held earlier this week, was attended by an incredible seven-eighths of the world’s publicly traded gold and silver companies by production, as well as leading metals and mining executives, money managers, analysts and investors.

We were one of the founding members of the DGF back in 1989, when I first bought a controlling interest in U.S. Global Investors. During this year’s forum, I was honored and moved to be recognized for our company’s contribution to the group’s creation and ongoing legacy.

U.S. Global gold and precious metal expert Ralph Aldis and I had the opportunity to meet with a number of companies and analysts while at the DGF. We were surprised to learn that some were still unaware that quantamental factors were being applied more and more to gold equities investing. Here at U.S. Global, for example, we like to combine old-fashioned, bottom-up stock selection with cutting-edge quant strategies such as data mining and machine learning.

30 Years of (Denver) Gold

According to Pierre, annual global gold demand has exploded in the years since the first DGF was held. Demand grew more than fivefold, from a value of $32 billion in 1989 to $177 billion in 2018.Indeed, much has changed in the precious metals and mining industry in the past 30 years, as we were all reminded by my longtime friend and mentor Pierre Lassonde. Pierre, as many of you know, is the legendary co-founder, along with Seymour Schulich, of Franco-Nevada, the first publicly-traded gold royalty company. What you may not know is that Pierre is also one of Canada’s most gracious philanthropists and currently serves as the chairman of the Canada Council for the Arts Board of Directors.

Loyal readers know that today’s central banks are net buyers of gold as they seek to diversify away from the U.S. dollar. But 30 years ago, they were net sellers. In 1989, banks collectively unwound as much as 432 tonnes from their reserves. Compare that to last year, when they ended up buying some 651.5 tonnes, the largest such purchase since the Nixon administration, with Russia and China leading the way.

China and India now representing more than half of total global gold demand
click to enlarge

Speaking of China… Pierre pointed out to us that we’ve seen a significant shift in gold demand over the past 30 years, from west to east, as incomes in China and India—or “Chindia”—have risen. In 1989, Chindia’s combined share of global demand for the precious metal was only about 10 percent. Fast forward to today, and it’s 53 percent!

“Don’t forget the Golden Rule,” Pierre said. “He who has the gold makes the rules!”