LBMA GOLD CONFERENCE BOSTON - What did we learn ?
Having attended most major gold conferences for 35 years, each one leaves you with a residual feeling - invariably bullish or bearish - this one left me confused.
Two themes come to my mind for Boston and one is “incoherent” and the second is “LBMA puts on a show” … I’ll explain.
The dictionary defines “incoherent” as incomprehensible, not logical nor internally consistent - it is often a problem of expression rather than intellect.
On the Sunday before the conference there was a beautiful irony for our small group who walked the 2 mile “Freedom Trail” in Boston - the cradle of American independence. We saw great meeting rooms where once highly principled and great orators gave meaningful speeches, giving birth to the Declaration of Independence from Britain. Our genial, larger than life American host was quick to announce us at every venue as Englishmen and asked (to his amusement at least) if there was any spare rope available. As an Englishman, we get this all the time.
And then we arrived outside City Hall where a crowd of about 3000 disaffected youths protested, with banners with every manner of complaint - with impassioned but incomprehensible speeches - and I kept asking myself - what are they complaining about - they were deeply angry, but they lacked coherency. Back inside the safety of the Boston Plaza I was sure to find meaning and direction in life.
The Central Bank sessions are normally a little bland and you have to work hard to find nuggets of thought that expressed what these guys really think about gold… nuanced is the word that comes to mind. This year they were remarkably candid but only with rhetoric (they like gold), but not with numbers. However, it was the ‘financials’ session that surprised - they matter - these chaps had worked for organisations with $148 billion, $18 billion and $1 trillion under management - and they struggled to elucidate why gold should be on the menu - nothing to see here so go about your business. Gold is unloved and currently not relevant. This set the tone for the full 2 days. The gold refining session was a disappointment. Rarely the sexiest of subjects, the refiners remain victims of super-tight margins, rising costs and increasing regulatory burdens. Despite deep experience on the platform, it came across as a moan as they failed to elaborate how they or indeed the market could be improved.
And then there was the outlandish forecast by the delegates predicting at 25% increase in the gold price in 12 months to $1532 - either this was a conference operating in two parallel universes, where delegates were deeply bullish and speakers bearish - or an effect of voting anonymously meant that delegates put in super-high figures for sheer devilment - either way, there was a disconnect… or as you might put it, an incoherency.
- LBMA PUTS ON A SHOW
An American friend shared with me the other day that Broadway these days is only about musicals … you know, plays devoid of meaningful dialogue, character development or much of a storyline… not real theatre, no real insight, just a light but genuine feel good factor. If you do find yourself at this type of event but you don’t buy into it, you experience a strange detachment. That is how I felt in Boston.
All credit to the LBMA who host the event and who I know work incredibly hard to please the markets that they serve. Perversely the stunning audio-visuals and choreography (and perhaps the use of apps to vote or ask questions) plus the Billy Joel tribute show at the dinner were so impressive that some attendees perversely felt removed from the event. These conferences are perhaps becoming about “infotainment” and not about direct involvement. How else to explain the dissonance in the price forecast between the stage and the stalls.
In the final summary session one looks for a light-hearted overview of the ‘show’ which both highlights important business themes, but also the mood in the room. Not an easy job - I have done this in the past - and it seemed John and David struggled more than ever to ‘read the room’ and described things as low energy.
Maybe this was because the way that conferences work these days, the audience has become slowly removed from the process … a real case of art imitating life in a new form of theatre. What’s the take-away for gold prices … well that depends upon who you believe.
02 Nov 2018