Trump Tariffs: Disruption or Opportunity?

Kitco’s Senior Mining Editor and Anchor Paul Harris interviews John Ciampaglia, CEO of Sprott Asset Management, at the 2025 BMO Global Metals, Mining & Critical Minerals Conference. Ciampaglia discusses the impact of potential tariffs on metal markets and the resulting price volatility and arbitrage opportunities. The conversation also explores the increasing interest in physical gold driven by central bank buying and a potential return of Western investors, along with speculation surrounding U.S. gold reserves. Finally, Ciampaglia highlights the evolution of the precious metals sector and introduces Sprott's new actively managed gold and silver miners ETF (GBUG) and their silver mining ETF (SLVR).

Video Transcript

Paul Harris: Hello and welcome back to Kitco Mining with me, Paul Harris, at the 2025 BMO Global Metals and Mining and Critical Minerals Conference in Hollywood, Florida. Prices are high in the precious metals, but are investors coming back? Joining me is John Ciampaglia, CEO of Sprott Asset Management. John, welcome back to Kitco.

John Ciampaglia: Great to be back.

Paul Harris: Before we discuss whether investors are returning to the precious metals space, let's take a step back and start with the bigger picture. We are in the U.S. President Donald Trump has made various announcements during his first month in office that have impacted the metals mining and energy space positively and negatively. Obviously, now the industry must deal with that. Has the Trump sugar rush run its course?

John Ciampaglia: Obviously, Trump came in with a very pro-business, deregulation mandate. Unfortunately, there's a lot of uncertainty in the market affecting geopolitics, but specifically with metal markets, we're seeing severe disruption, obviously happening in the gold and silver, the uranium market, and the copper market, because of the threat of potential tariffs. If you consider how much metal the U.S. buys in terms of those I just mentioned, they're a net importer. Uranium, huge importer, gold, silver.

John Ciampaglia: If you're going to tariff those things, how will it lead to price formation? Are you going to have bifurcated prices? You're starting to see price differences for things like uranium and copper in the United States, which are trading at a premium to other places in the world. As a result, metal is being shipped from all over the world to potentially take advantage of that arbitrage. It's creating a lot of volatility. It is creating some uncertainty. But I think the underlying tone that's going on, or the shift is bullish.

Paul Harris: Tariffs, of course, are another implication or potential implication or possibility of actual metal shortages.

John Ciampaglia: At the end of the day, someone must pay the tariff. If you're a net importer of the metal, you must make a decision. If you want the metal, you'll have to pay up for it. That's why you see things like copper in the COMEX (Commodity Exchange) trading at a 10% premium. We're seeing uranium trading for $2.50 more a pound that's sitting in the U.S. versus Canada. We're seeing tens of billions of dollars of gold being shipped from London vaults to COMEX vaults. There's a lot of potential arbitrage value and potential risk to some parties that may not be able to deliver the gold if they get called in their financial instruments.

Paul Harris: In the news stream in recent days and weeks, gold has figured heavily in that. The new stream has included the possibility of an audit of U.S. gold inventories in Fort Knox, for example, marking U.S. gold holdings to market and what that potentially means for the U.S. balance sheet, and even the possibility of a new gold standard. Where do we start with all that? What are your thoughts on some of those items?

John Ciampaglia: There's a lot of speculation right now, and people who are much more in the weeds on this stuff could give you a better guess, but I think it's quite fascinating what's going on. Starting with the gold audit, it's interesting part of this DOGE effort is that they want to go and see the gold. The more important question is not, is the gold there? How many bars are there? The question to ask is, who has title to the gold? That's the more important question. I hope it gets asked and answered because that's the question we've always wondered about.

How much of that gold has been leased out? Is it swapped out? Has it been pledged? How much is held by other governments? What's the real stockpile? Now, if you believe the U.S. is one of the largest holders of gold, you have to ask yourself why they wouldn't want the value of that gold to go up. That's exactly what the price has been doing. It's been creeping up to 2,900. It doesn't seem like it wants to slow down. The motion is to the upside. We haven't seen the historical shenanigans when the gold price strengthens, the CFTC (Commodity Futures Trading Commission) comes out, changes margin limits on gold and smacks it down. It just feels like the trajectory for gold is likely to continue to the upside.

Paul Harris: I think that uncovers or focuses on a peculiar dichotomy in the gold space because, on the one hand, there are people that want increased visibility and transparency, World Gold Council, for example, and obviously, a lot of the industry players that are here at this event. But the customers of gold, the people that buy it, a lot of those buy it because it is a very silent, almost invisible asset when you've taken possession of it—an interesting dichotomy at play there.

John Ciampaglia: Absolutely. I think one of the key reasons why the Sprott Physical Gold Trust (PHYS) has been so successful, and we're approaching almost $10 billion in its 15th year anniversary this year, is because people know that our gold is fully allocated, segregated, stored at the Royal Canadian Mint. We don't do any unallocated gold. These things are starting to become more valued again by people who are concerned about whether there is enough gold backing some of these paper contracts. Is there enough gold to cover some of these unallocated positions? I think that's one of the value propositions that has allowed us to scale our vehicle over the years to $10 billion.

Paul Harris: Now, another group that is buying gold in increasing amounts are central banks. In addition to buying more gold, they're repatriating gold from the United States, from the UK, back to their own central banks, so they can look after it for themselves and have that trust. Much has been written about central bank buying, particularly in Eastern economies. How are Western investors reacting to this? Are they starting to return to the market?

John Ciampaglia: This is a fascinating development, and we view it as gold reasserting itself as a monetary metal. We see several central banks that have helped power the price of gold to new highs, particularly last year. It's not just one central bank. Many are changing their reserve mix of foreign assets away from U.S. dollars and U.S. Treasuries to gold. That's a very powerful driver because, as we know, there were long periods when central banks were net sellers of gold, which obviously put a lot of downward pressure. Now, we have the reverse happening.

What about Western investors? Because we know Eastern investors have a very high affinity for gold, whether you're in India or China. Western investors have been indifferent up until recently. We saw a flurry of gold buying interest in 2020 during COVID, safe haven buying. But then that dissipated. Last year, if you look at the ETFs globally, they were net sellers of gold. It hasn't been until recently that the trend has flipped to net buyers of gold through the ETFs. That's very powerful because if you can get central banks buying at the same time that Western investors are buying gold, that's a very powerful tailwind for the price of gold, which is why I think it's hitting all-time highs.

Paul Harris: I get to travel to the U.S. various times a year. One thing I've noticed in recent months is the increasing amount of advertising on national TV for retail coins and bar selling or buying. It seems that gold is being marketed to the general population to an increasing degree.

John Ciampaglia: I think if you take a step back, gold is very under-owned by institutional investors. Very few own it. Retail investors obviously own more, but it's still a very small part of the overall wealth mix. I think investors, they turn to gold when they are feeling uncertain, when they want that insurance potential in their portfolio, that safe haven, the traditional role of gold as a safe haven asset. With all the uncertainty in the world, some of the fracture geopolitics that we're seeing, that's a key signal for people to say, maybe I need to have some more hard assets in my portfolio. I'm not surprised that people are pushing that message right now because we are.

Paul Harris: Let's turn a little bit more to Sprott's wheelhouse. I say that bearing in mind the variety of products that Sprott offers the general public. Much of the narrative in the space in recent years has been about passive buying via ETFs, such as the ones that you manage, quant trading, the impact and/or distraction of crypto on the space. How do you see the precious metal sector evolving? What do you think will be the key trends to watch for this year?

John Ciampaglia: I'd say the big trend is, obviously, will we see a continued return of Western buyers to physical gold, and we're starting to see that in size in the last few weeks as some of the geopolitics are getting a little bit crazy. The other part is related to gold stocks. Last year, we had a real mixed bag of performance among some of the miners, and that really disappointed investors because in an environment where gold is going up, say 25%, you sure hope that the companies that you own are capturing that operating leverage, which they're designed to do. Some companies did, and some companies did not.

John Ciampaglia: We're starting to see some better results. Some of their cost issues, I think, are getting under control. The gold stocks have obviously performed quite well year to date. At the conference two years ago, there was a real malaise on gold stocks. Nobody was interested. It was all about lithium. Last year, I would say it was more about uranium. This year, gold has reasserted itself, and there's much better interest.

John Ciampaglia: Now, at the end of the day, these gold companies need to perform. They need to develop their projects and grow their earnings and capture that operating leverage that they're designed to do. That's really going to be the test this year. If that plays out, you could see a catch-up trade here, and you can start to see capital moving back into these gold stocks.

Paul Harris: We can certainly see some catch-up happening. Looking at the gold companies, several of them have posted year-on-year gains of over 100% on their share price. Obviously, some much better than that, some worse than that. A number of my interviewees here at this event have reflected that despite the high metals prices, investors still seem to be cautious and question whether the companies will manage well the bonanza that the gold price is giving them. There still seems to be some doubt on that. To a certain extent, you could argue that gold companies are still in the penalty box.

John Ciampaglia: I think that's a fair assessment. I think the scar tissue from the last cycle runs very deep, and people have long memories. I think the discipline that has been put on the sector is real. They do not want to see transactions, M&A deals and stuff that don't make a lot of sense because there were a lot of ill-timed, ill-conceived deals in the last cycle. We don't see that happening. We see many smarter, strategic, driven deals happening where companies are trying to combine that make a lot of financial sense, diversification-driven rationale. We see more of that happening.

John Ciampaglia: Investors obviously want to see the premiums around those deals because there was a period where we saw many zero premium deals or very low premium deals. That doesn't get investors very excited, and that's something we're going to watch out for. But you're right. I think you need the gold price to hold here. You need the companies to show that the profits will improve the bottom line and that they will remain very disciplined in terms of replacing reserves.

Paul Harris: I think you mentioned a moment ago, John, that you're seeing more inflows into your ETFs. I think you said, is it 10 billion? What money and what investors are you seeing coming in? Are they new investors or old investors returning after being out of the space for a few years?

John Ciampaglia: I think many of the usual suspects and characters have been more predisposed to owning gold in their portfolio. I think we're slowly getting new investors coming in. I'm always talking to institutions and at this conference, and they're willing to listen to our story about the role of gold. They see what's happening, this bifurcation of the world and de-dollarization. They're quite intrigued by gold. Are they all moving to gold? No, not yet, but I think many of them are doing the work. We're starting to see good inflows into some of our products again. Last year, we had a decent year, but given the price appreciation for gold, I would have thought we would have raised two or three times the amount we did.

Paul Harris: You mentioned M&A. We started to see a lot of deals happening. One of the recent ones that was announced just as this conference was getting underway, one of the key drivers there was to get to the scale to attract investor interest, to separate themselves from that thick band of mid-tier gold producers in the $1-$4 billion market cap range. M&A for scale. A lot of people think that that's not a good idea. What makes for a good M&A deal for you?

John Ciampaglia: It's not about getting big for the sake of getting bigger, but there is a rationale to get to scale and improve your stock liquidity. Because we talk to hundreds of institutions, and they say, look, we might get excited about a story, but if we cannot position ourselves in and out of that company because there isn't enough liquidity, we won't invest in it. The investment managers today are so big, and they have so many different risk management controls and liquidity screens that drive their investment criteria that if a company can't meet them, even if the project is fantastic or the projected returns are great, they just can't invest in the name. That's why companies say we need to be more relevant. Being more relevant is about derisking projects. Sometimes, it's about just liquidity.

Paul Harris: We talk a lot about excitement and need excitement to bring investors back. Obviously, posting great returns and great financials is one possibility there. M&A is another possibility. What do you think will generate excitement? What should companies be doing?

John Ciampaglia: Companies need to create value. There are a lot of gold companies, too many if you ask us. It's really about value creation at the company level. If you can't create value, I might as well own the rock. I think that's what the key competitor has been for many of these gold mining stocks is, I just hold gold because guess what? It's done well just holding the rock. That's the challenge: These companies need to create real value and do it consistently. That's the real challenge here.

The other element about bringing excitement back to the market, and again, excitement might be the wrong term, but again, people will seek gold when they want insurance. When people are fearful or uncertain, then that's when the safe haven type of flows can return to the market like we saw in 2020. We're not saying we're in an epidemic type of mindset phase, but there are a lot of uncertainties right now. There are a lot of changing messages coming from different governments right now. That uncertainty could be a catalyst to move flows. We always say uncertainty is worse than bad news, and right now it just feels like there's a lot of uncertainty.

Paul Harris: Let's end here with your forward-looking statements, John. What are some of the things that people can expect to see coming out of Sprott Asset Management this year?

John Ciampaglia: We're excited about our new actively managed ETF, the first of its kind in the world that we're aware of. It is our actively managed gold and silver miners ETF with the very cute ticker symbol GBUG, G-B-U-G, that's just started to trade in the U.S. It's our active team that runs a billion-dollar mutual fund. We've taken their investment expertise and are offering it into the market in the ETF wrapper.

John Ciampaglia: You might say, well, what's the difference? ETF wrappers are increasingly more popular than mutual funds. They provide intraday liquidity; they provide transparency; they offer lower fees and tax efficiency, and it has become the preferred product wrapper for a lot of investors. We hope that offering our investment management expertise with our team with over 100 years of combined experience into this ETF wrapper that they can source on the U.S. exchange is another way for people to get involved in the gold and silver mining space. Have a look at that ticker. It's not a perfect clone of our mutual fund. It won't own physical gold, just the mining companies, but we're excited about that.

We also launched a silver mining and physical silver ETF a few weeks ago. That's starting to gain a little bit of traction. We're focused on filling in some segments in the market that are missing. We're excited about this silver mining ETF because we designed the index with our partner, Nasdaq. We discovered that you only get about 35% exposure to silver with some of the other silver mining ETFs. The way we've designed our index, you get exposure around 70%. It's more of a pure play form to get exposure to silver.

Paul Harris: For GBUG, how many companies or positions will it have? What profile will you be investing in?

John Ciampaglia: It will largely be the same companies we're holding in the mutual fund. I think they're going to be holding around 35 companies. It's more of a focus on the mid-and smaller-cap companies, where I think our team does a lot of very intense digging and analysis, visiting many of those companies in person on the ground and mine sites. It will be like our mutual fund, but in the ETF wrapper and without any physical gold allocation, which we have.

Paul Harris: I wish you the best of luck with those, John. I look forward to catching up with you later in the year and finding out how they're doing. John Ciampaglia, thank you very much for joining us today.

John Ciampaglia: Thanks for having me.

Past performance is no guarantee of future results. One cannot invest directly in an index.

Gold and precious metals are referred to with terms of art like store of value, safe haven, safe asset and insurance. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.

"Bullish" refers to a financial market in which prices are rising or are expected to rise.