Pan African: The last decade and the world in which it now operates
Economically and politically, the world has been tumultuous and volatile during this time. Economically, it had to deal with challenging financial cycles and the impact of COVID-19. The pandemic and subsequent escalating geopolitical conflicts, especially in Ukraine and the
Middle East, have threatened lives and economies, while the impact of climate change affects the planet and its inhabitants.
The South African economy faced the consequences of power curtailment, state capture and low levels of investor confidence. Social upheaval reached a boiling point during the riots of July 2021, the worst and most disruptive incident of violence that South Africa experienced since the end of Apartheid.
The global status quo is one of bi-polarity fragile financial systems, ever-increasing sovereign debt levels, as well as concerns about the next economic downturn.
GOLD REAFFIRMING ITS STATUS AS A SAFE-HAVEN ASSET
Gold has regained its safe-haven status amid ongoing higher-than-expected worldwide inflation and anxiety over geopolitics, elections and monetary policy – all predictable reasons for the value of gold to appreciate.
Gold has historically been considered an inflation hedge, however cooling inflation and the expected reduction in worldwide interest rates should also support gold’s investment case.
The perceived ‘weaponisation’ of the US$, following the outbreak of war in Ukraine, appears to have expedited moves by central banks in many countries to accumulate gold reserves in support of their respective economies and currencies.
Gold has demonstrated its ability to act as a strong hedge against uncertainty and as a currency to preserve real purchasing power. Gold has a track-record of millennia in this regard, an attribute that sets it apart from speculative cryptocurrency alternatives, such as Bitcoin.
Investing in a gold equity such as Pan African has several advantages to a direct gold holding. The Company provides its shareholders with a cash return in the form of dividends, increased leverage to the gold price, substantial near-term production growth and a number of internal growth opportunities, evidenced by its project pipeline.
