Insights

Video: Gold's 2019 Breakout – It's Just Getting Started

Gold bullion has seen a double-digit YTD advance in 2019, and gold mining equities have also posted notable returns. Tocqueville Asset Management's John Hathaway and Ryan McIntyre join Ed Coyne, Senior Managing Director at Sprott Asset Management, to discuss their outlooks and suggest the optimal gold portfolio allocation for most investors.

Insights tagged: Gold

The Sweet Spot for Gold Equities

Gold bullion consolidated in October, closing the month at $1,513, a 2.75% gain; YTD gold is up 17.97% as of 10/31/19. Silver bullion rose 6.55% for the month and has gained 16.86% YTD. As gold companies report Q3 earnings in the coming weeks, we expect robust earnings results to lift gold equity prices. The timing may be favorable as we are also heading into the best consecutive four-month seasonality pattern for gold mining equities.

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Gold: The “Third Rail” of Capital Allocation

This Real Vision video features John Hathaway, Senior Portfolio Manager of Tocqueville Asset Management, being interviewed by Dan Tapiero of DTAP Capital. They take a closer look at gold’s recent breakout and explore why gold equities are so attractive right now.

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Rule on Gold

Rick Rule, President and CEO of Sprott U.S. Holdings Inc., shares how the worldwide explosion of negative yielding debt shapes his bullish outlook on gold. He examines the impact that a “war on savers” has on the global financial system and on precious metals. Rule explains his outlook for the future of the monetary system by analyzing the evolving relationship between cryptocurrencies, precious metals and fiat currencies.

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Sprott CEO Says Gold Pullback Not Surprising, Sees Trouble Ahead for Economy

Peter Grosskopf, CEO of Sprott, shares his outlook for gold and the economy with Bloomberg's Shery Ahn and Amanda Lang on Bloomberg Markets.

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Capturing the Breakout in Gold and Gold Stocks

We believe the precious metals bull market is just in its early stages. Ed Coyne, Senior Managing Director, National Sales at Sprott Asset Management, joins special guests Doug Groh and Ryan McIntyre, Portfolio Managers at Tocqueville Asset Management, to discuss their outlooks for gold bullion and gold equities, and suggest the optimal gold portfolio allocation for most investors.

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Gold’s September Pullback is Healthy

Given gold’s sharp rise since May, September’s correction was not unexpected. We believe it is reflective of a new consolidation phase, and likely to be short term in nature. All factors that we consider to be significantly correlating to gold bullion indicate that we are still in the early stages of a major long-term advance.

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Owning Gold and Precious Metals Doesn’t Have to be Taxing

For many U.S. investors the returns provided by owning physical gold — and the other precious metals including silver, platinum and palladium — come with a sobering surprise when the assets are sold and it’s time to pay taxes. The reason: The U.S. Internal Revenue Service (IRS) categorizes gold and other precious metals as “collectibles” which are taxed at a 28% long-term capital gains rate

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Negative Rate Folly

In our view, gold’s role as a non-correlating store of value has rarely offered more portfolio utility than it does today....The most troubling legacy of contemporary central banking has been the emergence of negative nominal interest rates. The fact that they actually exist, only highlights the dire nature of global financial imbalances. 

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Gold Soars in August to Best S&P 500 YTD

Gold added $110 in August to close the month at $1,524, gaining 7.8% for the month. YTD gold is up 18.6%, ahead of the S&P 500 Index's rise of 15.34%. Gold equities impressed even more, climbing 46.4% YTD as measured by Sprott Gold Miners ETF (SGDM).

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Minsky Moment

Gold is clearly responding to a global pivot by central bankers back towards concerted monetary easing, and the intractable nature of excessive global debt levels suggests we are in the very early innings of the developing easing cycle. In short, for gold this is the real deal and we suspect things are just getting started.

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The Rebirth of Gold as Money

The debate over gold’s place in a modern investment portfolio has been well covered. Call it the “Pet Rock” versus the “End of Fiat Currency” grudge match. But the facts are not subject to such intense interpretation....An enormous transformation of the gold market can occur once digital gold attracts the volumes needed to make it a serious business.

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We're Working in 'Completely Different Environment' Amid Strength in Gold

Shares of Sprott (TSX: SII) have posted big gains this year as gold prices continue to climb higher. Sprott CEO Peter Grosskopf joins BNN Bloomberg to discuss his outlook for the precious metal and the firm's acquisition of Tocqueville Asset Management's gold business.

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Gold Rally Strengthens on Rate Cut, Silver Follows

July was positive for both gold and silver, which were propelled by the Fed’s interest rate cut on July 31, its first cut in 11 years. Any hope that this is a "one and done" rate hike has quickly been dashed with the latest U.S.-China trade war salvo. The long-term picture remains firmly intact. Gold and silver continue to rise as the market adjusts to a new central bank easing cycle.

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Gold and Silver Breakout – What Next?

We predicted that 2019 could surprise to the upside. YTD, through the Friday, July 19 close, gold bullion was up 11.14% and silver bullion has gained 4.58%....The wind is now at our backs and we believe that both gold and silver will climb higher. Silver, in particular, has the potential to significantly outperform gold.

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Gold Continues Bullish Consolidation

Last week, gold bullion continued its bullish consolidation ($1,380 support, $1,440 resistance), and gold equities recovered to touch new 52-week highs as Federal Reserve Chairman Jerome Powell reaffirmed the likelihood of a July 31 interest rate cut.

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Gold Tests $1,400 Breakout

To recap gold’s positive trend, gold continues to trade above the $1,370/80 per ounce level which verifies a critical multi-year base breakout. Gold’s rise has been impressive as multiple assets have corroborated the move, and the price action on many gold-related assets has been emphatic.

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Building Shareholder Value in the Gold Mining Sector

Ryan McIntyre, Portfolio Manager of Sprott Hathaway Special Situations Strategy, discusses how intrinsic value creating activities are likely to continue across the gold mining industry: "Both large and small companies are examining many alternatives to add value independently of the gold price."

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Gold & Precious Metals Investing with Sprott's Ed Coyne

Charley Wright of Strategic Investor Radio interviews Ed Coyne, Senior Managing Director at Sprott. They discuss Coyne's unconventional career path from architecture to finance, and explore why precious metals are one of the best alternatives for investor portfolios.

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In Gold We Trust Report 2019: Gold in the Age of Eroding Trust

Sprott is pleased to be a major sponsor of the Incrementum's 13th edition of the annual In Gold We Trust report. Authors Ronald Peter Stoeferle and Mark Valek explore the erosion of trust in international monetary policy: "The steady buying of gold and the repatriation of central bank gold clearly indicate growing mutual distrust among central banks." 

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How Billionaires Prepare for Bear Markets

Many investors turn to gold to hedge against the prospect of a bear market, defined as a prolonged downturn in which stock prices fall by at least 20% over two months or more. Gold is considered the undisputed king of uncorrelated assets, and is a proven, safe haven investment that lets investors sleep at night.

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I've Never Seen These Kinds of Valuations

Tocqueville and Sprott Asset Management smell opportunity in a woebegone asset: gold.

Institutional Investor's Julie Segal interviews John Hathaway, Tocqueville Asset Management, and Whitney George, Chief Investment Officer of Sprott Asset Management. 

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We're Betting Against the Street On Gold

Peter Grosskopf, CEO of Sprott, was a keynote speaker at the recent May 1-2 Mines and Money New York Conference. He joins KITCO News' Daniela Cambone to discuss the macroeconomic forces providing tailwinds for gold.

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Technical Resolution

On the surface, precious metals activity was subdued for the week ending Friday, April 26. Spot gold rose 0.85% to $1,290.35 and continues to hover just below the $1,300 threshold, with trading reflecting a technical tone.

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Miners Ride a New Wave of Consolidation

We believe a new gold mining mergers and acquisitions (M&A) cycle has been ignited, and we expect this merger boom to accelerate over the next several years. Exploration is down, and new gold discoveries are scarce. Miners are strategically combining in order to increase production, reduce costs and improve operations. 

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Recalculating

As the gold price has oscillated around the high-profile $1,300 level throughout 2019, it has become increasingly apparent that strong demand from Eastern (physical) markets below $1,300 is roughly offsetting a lack of urgency in Western (paper) markets above that price point.

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Paper Tiger

After much late-March huffing and puffing in COMEX markets to achieve a month-end close for spot gold below $1,300, trading in physical gold markets proved especially robust during the first week of April.  To us, this suggests gold’s sub-$1,300 spot price is destined to be short lived.

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What You're Not Hearing about Cain, Moore and the Gold Standard

If Alan Greenspan and Stanley Fischer can talk about gold as a policy tool, why can't Trump's nominees?....There is nothing wrong with talking about gold. We should follow it more closely not less.

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On the Clock

Trading in gold markets during the week of 3/25/19 seemed heavily influenced by calendar-related items. 

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Busy Week

This past week witnessed an unusually rich sequence of gold supportive events.  Indeed, four successive developments came so fast and furious that we expect strong performance in the gold complex in coming weeks as investors have a bit more time to process the significance of recent news flow. 

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Gold Shares as Rising Phoenix

We believe that gold equities are poised for a span of significant nominal and relative performance. A new wave of mergers and acquisitions (M&A) is likely to provide a strong catalyst for gold miners in 2019.

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Sprott CEO Sees "Billionaires and Family Offices" Buying Gold

Peter Grosskopf, Sprott CEO, joins BNN Bloomberg and shares his insights on growing interest and investment in gold bullion. Grosskopf opines on the state of the precious metals industry and why he believes dynamics support more M&A activity. 

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Barrick-Newmont Deal Would be a "Merger of Equals"

Shree Kargutkar, Portfolio Manager, Sprott Asset Management, joins BNN Bloomberg to weigh in on the potential Barrick-Newmont merger, which he views as a "merger of equals" between the Canadian and U.S. mining majors. 

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2019 Top 10 List

Given the seminal nature of catalysts now in play for precious metals, we felt the timing appropriate for a comprehensive review of factors driving the gold price. In this report, we have compiled our Top 10 List of fundamentals supporting a portfolio allocation to gold in 2019

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Gold's Time to Shine

Get our positive outlook on gold and gold equities. Watch/listen to this webcast replay featuring Ed Coyne, EVP at Sprott Asset Management and special guest John Hathaway, Senior Portfolio Manager at Tocqueville Asset Management.

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Cryptocurrencies Fail to Prove their Mettle

The reports of gold’s death at the hands of cryptocurrencies seems to have been greatly exaggerated. We’ve warned investors about the instability of the cryptocurrency market and the false equivalency with gold over the past two years. New data validates our concerns.

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More Gold Sector M&A on the Horizon

Shree Kargutkar, Portfolio Manager, Sprott Asset Management, joins BNN Bloomberg to talk about increased M&A activity in the gold sector, and weighs in on the Barrick-Randgold and Newmont-Goldcorp deals.

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Gold Poised to Shine in 2019

Financial Journalist Liz Claman interviews Ed Coyne, EVP National Sales, on his 2019 outlook for gold bullion and gold equities. 

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Catalyst for Gold Locked and Loaded?

We believe that gold bullion and gold mining equities may be poised for a multi-year uptrend. Gold bullion beat U.S. equities for the month of December, the fourth quarter, and the full calendar year of 2018. We suggested throughout 2018 that the catalyst for gold’s next important rally would be growing recognition that the Fed’s current tightening cycle was reaching a conclusion.

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Housing Crunch

During this holiday season, we reiterate our stance that the Federal Reserve’s dual policy agenda of simultaneous rate hikes and balance sheet reduction is crimping global dollar liquidity to the significant peril of reigning financial asset valuations....U.S. residential real estate has hit a brick wall, and in our experience, no economic sector is more reliably predictive of growth trends than housing. 

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Everything is Cool

We have maintained that financial asset prices cannot sustain rising rates with this much debt in the global financial system. We have presented our case that Fed rate hikes are already causing financial stress in peripheral markets, and now this stress is washing ashore in the form of cardiac arrest at long-troubled American icons such as GE and Sears.... To us, it seems pretty clear there are growing rumblings for at least a pause in rate hikes. Gold is likely to erupt if this transpires.

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Real Assets Masterclass

Ed Coyne, EVP National Sales, joins a panel of real assets experts to discuss whether it’s time to hunt for investments largely unconnected to financial markets, given the Dow Jones Industrial Average's flirtation with new highs in 2018.

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Brinkmanship

During the next few months, we expect asset markets to come to terms with grossly misplaced investor faith in the sustainability of the Fed’s dual policy agenda of simultaneous rate hikes and balance sheet reduction — which amounts to little more than glorified brinkmanship. Recent market weakness supports our contention that Fed tightening is pinching global liquidity to a degree which threatens reigning valuations of traditional financial assets. Got gold? 

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Physical Matters

We believe gold sentiment may be turning in our favor. For the first time in 17 years commercial participants in gold futures — generally regarded as the “smart money” — have flipped their COMEX positioning to net long.  Reik: "As we await rebirth of western investment demand in gold markets, we suspect an imminent clash between hyper-bearish COMEX spec positioning and staunch global physical demand is about to ignite some short-term pyrotechnics. This should be interesting to watch!”

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Buying Opportunity as Gold and Silver Shorts Reach Record Levels

As investors flee the emerging markets and seek the safety of the U.S. dollar and U.S. equities, they've increased their short positions in commodities. Most surprisingly, and counterintuitively, bets against precious metals (gold, silver and platinum) have reached record levels.

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Summer Test

This summer has been a frustrating stretch for gold bugs. Trey Reik writes: “As the scale of emerging markets dislocation expands on a weekly basis, the stored force in collapsing EM currencies is still funneling towards a strengthening U.S. dollar, and in turn reflexively pressuring the gold price.” In the face of this bearish sentiment, we have been encouraging Sprott clients to exploit summer price movements in precious metals to their maximum advantage. 

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Gold Slumps on Trade War Fears

Portfolio Manager Shree Kargutkar believes that "gold may prove to be the ultimate winner given the most recent trade conflicts." Despite the U.S. dollar's recent strength, Kargutkar argues that it is likely to be short-lived and that all the elements are in place for a durable bull market for precious metals and precious metal equities.

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Tariff Tension

Senior Portfolio Manager Trey Reik answers the question: Why isn’t gold doing better? After trading in a bullish consolidation pattern for 18 months, gold appears to have lost some of its mojo. Trump’s June 1 tariff announcements and the U.S. dollar's spring rally have hurt gold and other commodities. Reik counters by arguing that gold’s price stability has been fairly unique among asset classes, and that right now is a fortuitous entry point for portfolio allocations to gold.

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Periphery to Core

In this report, we employ the analytical framework of periphery to core.  We have organized this letter around evidence that the Fed’s dual policy goals are straining financial conditions in peripheral components of four critical sectors:  emerging markets, global financial institutions, U.S. corporate credits and U.S. consumer credits. 

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In Gold We Trust Report 2018: Gold and the Turning of the Monetary Tides

Sprott is pleased to be a major sponsor of the Incrementum's 12th edition of the annual In Gold we Trust report, which discusses three fundamental turning points affecting the global monetary system. Report authors Ronald Peter Stoeferle and Mark Valek refer to these as “Monetary Turns of the Tide”, and write that “Gold will definitely contribute to staking out a comfort zone in the turmoil of the tidal changes that we have discussed.”

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Gold Shows Up at the Berkshire Hathaway Shareholder Meeting

Senior Portfolio Manager Trey Reik responds to Warren Buffett’s distaste for gold, staunchly reconfirmed by Buffett at the May 5 Berkshire Hathaway Annual Shareholder Meeting. Reik finds Buffett's gold-versus-stocks comparison self impeaching, and suggests that a prudent allocation to gold could improve the risk-adjusted returns even for Berkshire Hathaway.

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Gold is Rarely this Cheap

Sprott Global Investment Executive Kenton Ralph Toews looks more closely at how commodities, relative to equities, are at their most undervalued in decades. Gold is especially inexpensive relative to the S&P 500. 

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“QT” or Not to “T"? That is the Question

Senior Portfolio Manager Trey Reik cautions us on the dramatic increase in the Libor-OIS spread. He sees a black swan now unfurling in U.S. financial markets: the Fed is on the verge of major policy error by underestimating the blunt force of the monetary brakes it is applying via rate hikes and QT, Quantitative Tightening.

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Cryptocurrencies, Solid Gold or Just a Flash in the Pan?

Sprott Asset Management CEO John Ciampaglia examines the relative merits of gold and cryptocurrencies as these two alternatives to traditional fiat currencies duke it out in the “monetary” boxing ring of investor sentiment.

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Alternative Investing with Gold and Silver

Ed Coyne, EVP National Sales, and Trey Reik, Portfolio Manager, discuss the importance of a precious metals allocation of gold and silver, and how it can potentially improve risk-adjusted returns.

 

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Gold Resilient Despite Market Volatility

The calm of equity markets across the world was rudely interrupted in February by a sudden spike in volatility which impacted virtually every asset class. Volatility across equities, bonds, currencies and commodities rose sharply. Gold bullion declined a modest 2.08% during February, and its relative lack of volatility merits notice.

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Oopsie Daisy! Equity Markets Stumble in Early February

Senior Portfolio Manager Trey Reik looks beyond the short-term damage of the Feb. 5 market selloff, and explores why the current fed tightening cycle is likely to increase the stress on individual consumers and inflict damage across a broad spectrum of financial assets.

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Enhancing Portfolio Diversification with Gold and Silver

Ed Coyne, Executive Vice President at Sprott Asset Management discusses how an allocation to gold and silver can complement equities in an investment portfolio, and why Sprott advocates a 5% to10% allocation for most investors. Coyne also introduces the Sprott Physical Gold and Silver Trust (CEF), which represents the successful takeover of Central Fund of Canada.

 

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Why Gold and Gold Equities Can Thrive in 2018

With the beginning of the new year, we have entered a seasonally strong period for gold bullion and gold equities. Gold bullion posted a strong gain of 3.23% in January, ending the month at $1,345.15 per ounce. Even so, investor sentiment towards gold and gold equities continues to remain relatively muted.

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2017 Redux

Gold bullion rose a respectable 13.09% in 2017, posting its strongest annual gain since 2010. Senior Portfolio Manager Trey Reik explores why gold's performance stacks up well against other alternative asset classes.

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Just Get Tax Reform Done!

Senior Portfolio Manager Trey Reik takes a closer look at Trump's tax reform. Eager for the tax bill to pass, Trump boasts in a recent tweet, “It will be the BIGGEST TAX CUT and TAX REFORM in the HISTORY of our country!” We disagree. 

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Gold Equities are Currently on Sale

Portfolio Manager Shree Kargutkar says, "gold is likely to benefit in early 2018 from its traditional first quarter strength."  He also explains why gold mining equities are cheap right now, and why high-quality miners are positioned for strong earnings performances.

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Bridging the Performance Gap Between Gold and Miners

Senior Portfolio Manager Trey Reik examines the interplay between gold bullion and gold equities. This relationship has been noteworthy in 2017, given an anomalous performance gap that we believe may provide investment opportunity for precious metals investors.

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Gold Glittering Alone No More

Portfolio Manager Shree Kargutkar explains that while investment allocations to gold bullion and gold equities have been somewhat muted in 2017, we are now seeing signs of renewed interest in gold. Bridgewater Associates, the world's largest hedge fund, has been on a recent buying spree.

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Why Doesn't Gold Get the Respect it Deserves?

Senior Portfolio Manager Trey Reik presents a collection of empirical evidence we view as compelling support of gold’s productive role as a portfolio-diversifying asset. He also addresses the disinterest in precious metals among institutional investors. He argues that given the current financial risks confronting investors, gold’s purchasing-power-protection seems an incredibly precious commodity.

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It's the Debt Stupid!

Senior Portfolio Manager Trey Reik explains we he believes that "virtually every measure of domestic and global debt is significantly worse today than at its financial-crisis peak." He recaps gold bullion's performance in August, which despite the continued fervor for U.S. financial assets, has posted solid year-to-date gains, and broke through resistance at $1,300.

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Will Receding Rate Hike Expectations Give Gold a Lift?

Senior Portfolio Manager Trey Reik discusses why gold has spent the past seven months in a tight trading range between $1,200 and $1,300 per ounce. Given the stored force inherent in such a trading pattern, history suggests a breakout, whether up or down, is likely to be characterized by a steep slope. The question remains, which direction will gold follow?

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Why Cryptocurrencies (Bitcoin) are Unlikely to Usurp the Role of Gold

Senior Portfolio Manager Trey Reik addresses the explosion of interest in cryptocurrencies, especially bitcoin. He attributes the growing interest in digital currencies to a concern shared by many gold investors: resentment over the financially repressive policies of global central banks. But the investment merits of gold and bitcoin are substantially different.

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Have We Reached Peak Global Central Bank Liquidty?

Senior Portfolio Manager Trey Reik asks: "What is fueling this record-breaking investor complacency? We would suggest market perceptions of risk have been all but extinguished by relentless provision of central bank liquidity." He explains why gold's pullback is a reflection of persistent strength in U.S. equity markets. 

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Top-Ten Fundamentals Supporting Higher Gold Prices

Senior Portfolio Manager Trey Reik identifies ten market variables we view as bullish for the gold price: "With respect to precious metals, we have rarely observed such a confluence of gold-supportive technical and quantitative variables across such a wide spectrum of relevant asset classes."

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Is the Fed Worried About Irrational Exuberance in U.S. Equity Markets?

Senior Portfolio Manager Trey Reik looks at gold's lackluster performance in March: "We attribute this swift shift largely to a short stretch of particularly impassioned Fed jawboning, book-ended by the FOMC’s two crucial thought-leaders, Vice Chairman William Dudley and Chair Janet Yellen."

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