Sprott Precious Metals Watch
Paul Wong, CFA, Market Strategist: The tough year continued in October for many asset classes, including gold and other precious metals. Gold demand, however, was strong in Q3 2022 as long-term investors took advantage of lower prices to build positions. With financial system stress cracks showing up, central banks are now trying to balance aggressively fighting the highest inflation levels in 40 years while maintaining financial stability in over-leveraged governments and markets.
John Hathaway, Managing Director, Senior Portfolio Manager: "The parabolic rise in the dollar contains the seeds of its own demise. The kiss of death, as for all overcrowded trades, is that it has become front page news. Dollar strength is a mirage, the reverse image of the flaw inherent in all paper currencies. The fatal flaw is that they are the ever increasing issuance of fiscal decay. The façade of dollar strength foretells a comeuppance for all currencies in the form of a steep devaluation in terms of gold."
Sprott ESG Gold ETF (SESG) is the world’s first ETF to exclusively source and refine gold from recognized ESG mining leaders (based on Morningstar’s universe of listed commodity funds as of 8/31/2022). SESG seeks to address the growing global demand for sustainable, green investment strategies, in an ETF that provides trust, transparency and traceability.
Global demand for silver is expected to rise 16% this year to 1.21 billion ounces, creating the biggest deficit in decades, according to the Silver Institute on Thursday night.
Holdings of physical silver held in vaults across London dropped to a record low in October, according to the data provided by the London Bullion Market Association (LBMA).
Indian silver consumption is forecast to surge by around 80% to a record this year, as traders draw down inventories in warehouses from London to Hong Kong after two Covid-riddled years.
Central banks bought a record amount of gold last quarter as they diversified foreign-currency reserves, with a large chunk of the purchases coming from as-yet unknown buyers.
Paul Wong, CFA, Market Strategist: Gold held above $1,700 since Q2 2020, but in mid-September, a significant risk-off wave occurred, breaking nearly every risk asset lower. The primary causes are higher than expected inflation data forcing yields (especially real yields) and the USD higher, two important gold drivers.
Doug Groh, Senior Portfolio Manager: It’s been a summer of doldrums for many asset classes. In our universe, however, uranium and other energy transition metals were a welcome exception to the market carnage — the spot uranium oxide composite was up 8.73% in August and 25.45% YTD. Precious metals, by contrast, lost ground as a liquidity crunch took hold in response to market declines and volatility. Gold lost 3.11% and silver fell 11.62% in August, while gold mining equities magnified gold bullion's loss by declining 10.00%.
China’s gold imports from the major refining hub of Switzerland jumped to the highest in more than five years, signaling demand improved as the Asian nation relaxed strict Covid measures.
Paul Wong, CFA, Market Strategist: July was another difficult month for most asset categories and was characterized by selling capitulation into exhaustion. Much more aggressive Fed rate hike expectations relative to other global central banks were a significant cause of U.S. dollar (USD) strength and rising real yields, which adversely affected gold. Although gold bullion lost ground, it remains relatively better off than many other assets for the year at -3.46% YTD through July 31, 2022.
SESG is the first gold ETF that invests in gold bullion that meets the environmental, social, and governance (“ESG”) and provenance standards specially developed by Sprott. Sprott has partnered with the Royal Canadian Mint (“RCM”) to provide investors with an ETF that only sources gold from companies and mines that meet Sprott’s ESG screening criteria. Initially, Sprott ESG Approved Gold will be sourced from several Canadian mines operated by Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) and Yamana Gold Inc. (TSX: YRI; NYSE: AUY; LSE: AUY).
John Hathaway, Senior Portfolio Manager: If the Fed is to abandon the practice of inflating financial assets, which would represent a secular shift in direction, substantial deflation lies ahead from which the purchasing power of gold will surely rise in real terms. If there is a return to business as usual, i.e., papering over policy mistakes, we believe that the gold price has the potential to rise to all-time highs in nominal terms.
Paul Wong, CFA, Market Strategist: Gold continued to perform as a safe haven store of value in what has been one of the most challenging six-month periods for markets in decades. Gold has managed to stay above the $1,800 support level despite the broader market carnage. By contrast, equities (as measured by the S&P 500 Index) recorded their worst first-half start to a year since 1970 and bonds (U.S. Treasury Index) registered their worst first six months since 1973 (based on available data).
Ted Oakley of Oxbow Advisors interviews Sprott's John Hathaway on the gold bullion and gold equities markets. Oakley and Hathaway discuss why investors should consider adding gold to their investment portfolios and explore how gold affects portfolio diversification.
Gold may be heading for another rally, with warnings over a global economic slowdown paving the way for a fresh push toward $2,000 an ounce.
Paul Wong, CFA, Market Strategist: May saw selling across most asset classes and scant appetite for safe haven assets such as gold. However, gold bullion has outperformed many other asset classes YTD and continues to do its job. Gold held its value with low correlation to the S&P 500 and lower volatility than other assets.
Just as we predicted the current wave of inflation in 2020 without going far out on a limb, we are also not going out on a limb with our announcement of persistent stagflation. We will certainly not have to endure a repeat of the stagflation of the1970s; rather, we’ll see stagflation 2.0, with its numerous peculiarities.
Maria Smirnova, Senior Portfolio Manager: Silver, from a pricing standpoint, is historically undervalued relative to gold and offers an attractive investment opportunity. Silver market fundamentals are strong, given that declining supply trends cannot keep up with rising, longer-term demand. Post-COVID, silver demand is rebounding, led by industrial, jewelry and physical coin and bar investment. We are excited about silver's importance to green technology and de-carbonization trends like EVs.
Douglas Yones, NYSE Head of Exchange Traded Products, interviews John Ciampaglia, Chief Executive Officer, Sprott Asset Management, on the recent launch of Sprott Uranium Miners ETF (URNM).
Paul Wong, CFA, Market Strategist: Gold lost 2.09% in April, a month marked by across-the-board outflows in many asset classes as volatility surged. By contrast, gold held in ETFs has increased sharply this year as the safe-haven flight continues. April was tough on many investment sectors, with the S&P 500 Index down 8.80%, the Nasdaq Composite Index declining 13.37% and U.S. Treasury bonds falling 3.10%. The U.S. dollar was one of the few beneficiaries as it neared multi-year highs.
Gold has pulled back from the highs seen earlier this year, but according to Maria Smirnova, senior portfolio manager at Sprott Asset Management, the yellow metal is on a positive path.
The price of gold has been treading water for 10 years while the investment fundamentals have improved dramatically. That is why, in our opinion, significant upside lies ahead for gold and related equities. Putin’s war introduces yet an additional reason to stoke investment demand for the yellow metal. It is not only war in the kinetic sense, but the reserve currency and cyber aspects that have far-reaching implications for gold.
Paul Wong, CFA, Sprott Market Strategist: Gold posted its all-time highest quarterly close on March 31, 2022, ending a volatile month that helped gold climb above $2,070 on March 8. By contrast, the U.S. Treasury Index suffered its worst quarter since 1973 and the S&P 500 Index posted its first negative quarter since Q1 2020. While gold may have climbed back to its highs on safe-haven flows, other positive gold supports are definitely in play.
Sprott Market Strategist Paul Wong joins Asset TV's Jenna Dagenhart to discuss Sprott's outlook for gold.
Paul Wong: "The Russian-Ukraine conflict is probably one of the biggest macro drivers in the marketplace. Many commodity users, transportation providers and financial facilities are heading toward self-sanction. There is almost a semi-defacto oil embargo going on right now....Before Russia-Ukraine, the gold market had started shaking off the hawkish Fed rhetoric. Russia-Ukraine has just amplified gold's value as a safe haven asset."
Throughout history, gold has played a prominent role in the advancement of human civilization. Seen as a representation of the sun, of the gods and of true value, gold is a form of real money without counterparty risks. Symbol Au, atomic number 79, gold has been used to adorn the tombs of the great pharaohs and to help power spacecrafts that extend the horizons of humanity’s domain. Learn more about gold’s importance in Sprott’s latest video – Gold: A True Store of Value.
Paul Wong, CFA, Sprott Market Strategist: The precious metals complex rebounded strongly in February as other assets faltered. Gold bullion is up 4.36% YTD through February 28, 2022, and silver bullion has increased 4.90%. Gold mining equities rallied and have gained 10.17% YTD. Investors sought safe-haven assets given the heightened concerns over the economic/market risks from rising interest rates and the escalation of the Russia-Ukraine conflict.
Stephanie Pomboy and Grant Williams, hosts of the popular podcast Super Terrific Happy Hour, interview a true legend of the precious metals industry, John Hathaway of Sprott Asset Management. The three discuss the Fed, inflation, the financial markets and the outlook for gold bullion and gold stocks.
Shree Kargutkar, Sprott Portfolio Manager: I believe that we are on the cusp of a generational opportunity today. I would encourage every viewer to dust off their old notebooks and do a little research on precious metals mining companies, especially those that are well managed, with attractive balance sheets.
The silver market has started 2022 on a reasonably volatile note as prices swung in a $3 range in January; however, despite the volatility, the precious metal is seeing strong physical demand, according to January sales data from the U.S. Mint.
Gold prices have remained resilient in recent weeks in the face of broad market volatility, decoupling somewhat from its typical price drivers — bond yields and the dollar.
Paul Wong, CFA, Sprott Market Strategist: Gold reached a high of $1,848 in January, but slid following the Fed's exceptionally hawkish statements at the January FOMC meeting. Market risks are rising and we believe that gold, as it did in 2018, is likely to stage a breakout given its safe haven characteristics.
Podcast: Welcome to Season 2, Episode #1 of Sprott Gold Talk Radio. Join Ed Coyne and Senior Portfolio Manager Doug Groh for a deep dive on gold mining stocks. Coyne and Groh explore the tremendous opportunity gold equities offer and uncover their potential to bring value to a diversified investment portfolio.
Overconfidence and apathy towards risk dominated investor sentiment in 2021, but, according to one precious metal fund manager, that could all change in the new year as the Federal Reserve looks to tighten its monetary policy, reducing the liquidity sloshing through financial markets.
Paul Wong, CFA, Sprott Market Strategist: For 2021, the gold price averaged $1,799 compared to $1,770 for 2020, up $29, despite losing 3.64% for the twelve months. Gold traded in a narrow range for most of last year as markets were ping-ponged by inflation and rate hike expectations. Based on historic patterns, gold's lengthy consolidation indicates that prices have the potential to rally sharply and quickly in the coming year. We explain why in our List of Top 10 things to watch for gold investors.
John Hathaway, Senior Portfolio Manager: With Fed policy taking a more hawkish turn, the fire hose of liquidity that has fueled market mania is being turned off. At this moment, it appears that confidence in the Fed and attraction to gold are binary. Our view is that a position in gold offers a very favorable asymmetric risk-reward proposition on the possibility that confidence will not survive 2022.
Per Jander, WMC Energy, Technical Advisor to Sprott Physical Uranium Trust: Research and development on small modular nuclear reactors (SMRs) is underway globally and generating tremendous buzz. But SMRs are not likely to contribute meaningful amounts of carbon-free power for another decade. By contrast, nuclear power plant life extensions and uprates hold the power to boost carbon-free electricity production in the interim and provide a bridge to a future date when new SMR technologies will be commercially available.
CEO Peter Grosskopf looks back at Sprott’s 2021 highlights and provides his outlook for the year ahead. With the strong support of clients and shareholders, Sprott overcame many obstacles to prosper this past year.
His key message for investors as we head into the new year?
"Stay the course."
Platinum and palladium prices are set to recover next year on the back of climbing demand, as vehicle production rebounds through 2022.
Paul Wong, CFA, Sprott Market Strategist: Gold investors are certainly ready to say goodbye to Groundhog Day $1,800. The good news is that the degree to which macro risks and headwinds are piling up is considerable. When juxtaposed against a near positioning wipeout for gold bullion, we are confident the year-long correction in gold is near its end.
The Irish central bank has been adding to its gold reserves as inflation in the euro area runs far ahead of the European Central Bank target.
The central bank of Singapore increased its gold reserves by 20% this year, buying gold for the first time in two decades.
Philip Newman & Adam Webb, Metals Focus
John Ciampaglia, CFA, CEO Sprott Asset Management: Nuclear power generates more than 50% of the carbon-free electricity in the U.S. while meeting 20% of the country's electricity demand. As the country and the world take steps to tackle greenhouse gas emissions, we believe that uranium and nuclear power will be critical to the solution.
For much of this year, rising inflation has been bad news for gold. Now it’s giving the metal a shot in the arm.
Host Ed Coyne is joined by Michael DiRienzo from The Silver Institute for a broad-ranging discussion on silver in our modern economy. The white metal’s unique status as both a store of value and an industrial metal has always made it a compelling investment, and with its new applications in advanced technologies, the story is even more fascinating.
Paul Wong, CFA, Sprott Market Strategist: Spot gold closed October at $1,783.38, gaining 1.50%. Gold managed to recover from the late September swoon that cleansed positioning and sent the entire precious metals complex into extremely oversold conditions. Gold may have priced in the Fed taper, but the yellow metal has yet to respond to the Fed’s inflation dilemma, which seems anything but transitory.
John Hathaway, Senior Portfolio Manager: Overconfidence, complacency, recklessness and intoxication appear to characterize today's financial market zeitgeist. An unraveling of the market's speculative euphoria would constitute a near perfect environment for gold bullion and gold mining shares given that the fundamentals have rarely appeared more solid.
Doug Groh, Senior Portfolio Manager: "September’s end brought on a new season and a welcomed uptick in gold prices with a settle at $1,757 per ounce. While gold struggled for the month, its positive finish reflected the uncertainty of recent macroeconomic progress. Gold mining stocks were harder hit in September as markets appeared to be factoring in a price-side and cost-side margin squeeze."
Sprott Market Strategist Paul Wong joins host Ed Coyne for a timely update on gold and gold miners. They focus on gold's wild ride in 2021 and analyze the impact of the Fed's monetary policy. Paul provides fascinating insights into the state of the precious metals complex.
Host Neil Christensen, Editor of KTICO, moderates a keynote panel discussion on the topic of "What is the outlook for gold in a post pandemic world?" Maria Smirnova, Sprott Senior Portfolio Manager joins Adrian Day, Chairman and Chief Executive Officer of Adrian Day Asset Management, John Wong, Portfolio Manager of Ruffer LLP and Peter Maletis, President of ASA Gold and Precious Metals Fund, Merk Investments. Smirnova: "We are living through a pause in gold and silver prices, after a great year last year...investors will comeback, and it doesn't take much to move the market."
Paul Wong, CFA, Sprott Market Strategist: Gold closed August at $1,814 with a dramatic dip early/mid-month and a quick recovery. Improved July payroll job data gave traders reason to question whether the Fed will maintain its easy monetary stance. Gold sold off but regained support, helped at month end by the Fed's dovish tone at Jackson Hole.
Many gold investors might be fretting over the prospect of the Federal Reserve curbing monetary stimulus, but Germans are still loading up.
Billionaire "Bond King" Jeffrey Gundlach sees the U.S. dollar on the decline and gold going a lot higher after the precious metal leaves its hibernation mode.
John Hathaway and Bill Strong join Stephanie Pomboy to reflect back on the Nixon Shock, and draw parallels to today. Pomboy describes it best: "Marking an anniversary can often seem like a hollow perfunctory exercise but I'd say this time, that is definitely not the case. The 50-year anniversary of the Nixon Shock and the policies he outlined in his speech carry unique resonance today."
As the best electrical conductor, silver is widely used across a variety of industrial applications — including the industries of tomorrow.
Paul Wong, CFA, Sprott Market Strategist: Gold bullion and gold mining equities gained ground in July. We saw a recovery in gold bullion investments as positions were repurchased and the decline in real yields to all-time lows added to the buying rationale. We believe that gold is well-positioned for a typical late summer/early fall rally, given record-negative real yields, a USD that may be topping out and waning taper/tightening fears.
The waning COVID-19 pandemic hasn’t stopped investors from piling into gold bullion so far this year.
Gold is back in demand among central banks. The Brazilian central bank increased its precious metals holdings by more than 52% in June.
John Hathaway, Senior Portfolio Manager: June's gold selling was almost entirely a knee-jerk synthetic affair driven by algorithmic, headline scanning robotic macro funds. We believe the smackdown was a temporary reaction to the perceived change in the Fed's posture towards possible balance sheet reduction. In our opinion, gold and gold mining stocks are compelling buys and the investment rationale for precious metals exposure remains unscathed.
Paul Wong, CFA, Sprott Market Strategist: Gold and precious metals took a drubbing in June following the hawkish FOMC meeting that added two rate hikes to the dot plot. Chaos among most asset classes ensued and gold was unduly affected by the strengthening USD and rising real yields. This doesn’t change gold’s long-term fundamental tailwinds, given the unprecedented expansion and reach of monetary and fiscal policies, akin to a grand experiment.
Central banks may be regaining their appetite for buying gold after staying on the sidelines for the past year.
Silver is one of the most versatile metals on Earth, with a unique combination of uses both as a precious and industrial metal.
Gold is making headlines once again after the safe haven asset had its strongest month of gains since July 2020. Sprott CEO Peter Grosskopf joins Asset TV's Jenna Dagenhart to discuss Sprott's outlook for gold and gold equities. Grosskopf: "I think it's a very healthy environment for gold and we believe it is likely to do well going forward."
Peter Grosskopf, Sprott CEO: 2021 marks the 50th golden anniversary of the "Nixon Shock," when the world's reserve currency was last partially tethered to gold. Since 1971, gold has mostly managed to trounce fiat paper as a currency and the yellow metal has held its own as an asset class. After 35 years in the gold trade and with the benefit of my Sprott team of experts, I feel qualified to state that today's environment may offer a stellar opportunity to gold investors.
Palladium’s surge has given it the title of most-expensive of the major traded precious metals, and its gap over gold may widen as demand buoys prices.
According to Incrementum’s 15th annual “In Gold We Trust” report, silver might be “the main winner of both monetary and meteorological climate change.”
Gold prices dipped on Tuesday as investors await a key US inflation report due later this week for clues on when the Federal Reserve may begin to talk about tapering its asset purchases.
Several European pension funds anticipate the price of precious and industrial metals to increase in the next year, according to a research study carried out by NTree International Ltd.
Paul Wong, CFA, Sprott Market Strategist: Gold's strong performance in May made up for the Q1 correction. Rising U.S. CPI data spooked markets, but helped boost gold and silver prices. As we head into summer (a seasonally strong period for the precious metals complex), we see several macro tailwinds working in our favor.
Silver Demand for Printed and Flexible Electronics Expected to Increase 54 Percent Over Next 10 Years
Almost 34% of the global silver supply in 2020 was used in electronic devices. And, while this overall segment is expected to continue to grow, one sector in particular – printed and flexible electronics – is forecast to rise a dramatic 54% from 48 million ounces (Moz) in 2021 to 74 Moz in 2030, consuming 615 million ounces over the 10-year period.
Gold headed for the biggest monthly advance since July, with inflation risks in focus ahead of key U.S. jobs data due later this week that will offer clues on the economic recovery.
Shree Kargutkar, Sprott Portfolio Manager: With palladium trading near record highs, we revisit the drivers behind palladium’s rise. Overall, we see continued support for palladium prices, even at the higher levels they’ve touched post-COVID. Supply and demand fundamentals have once again come into focus.
SILVER DEMAND FOR PRINTED AND FLEXIBLE ELECTRONICS FORECAST TO CONSUME 615 MILLION OUNCES OF SILVER THROUGH
Silver demand for printed and flexible electronics is forecast to increase 54 percent, from 48 million ounces (Moz) in 2021 to 74 Moz in 2030, consuming 615 million ounces for these applications during the 10-year timeframe, as this market continues to mature and expand.
It’s often overlooked in favor of its lustrous cousin gold, but the price of silver has jumped over 70% in the last year, with commodity strategists saying the rally is likely to continue as the global economy reopens.
The global precious metals market continues to see insatiable demand for physical silver.
Paul Wong, CFA, Sprott Market Strategist: April provided precious metals markets redemption from a challenging first quarter, with gold finishing the month up 3.60% and silver climbing 6.14%. Silver continues to benefit from expansionary monetary and fiscal policies worldwide and its key industrial role in the new technologies of the "green revolution."
Silver has been playing second investment fiddle to its more popular cousin gold for some time, but that doesn’t mean it isn’t a vary valuable commodity in its own right.
Strengthening consumer demand mitigated the impact of ETF outflows as global economies continued to recover.
Mints are running out of gold; not enough physical silver to cover paper - former U.S. Mint Director
A global shortage of physical gold and silver products has created a premium on coins and bars, and this premium is causing a disconnect between the spot price and the "true" price that retail investors need to pay, said Ed Moy, former director of the U.S. Mint.
Analysts and traders have sharply raised their platinum price forecasts as expectations of tighter supply and rising demand from the auto and hydrogen industries start to reverse a decade of declines, a Reuters poll showed on Tuesday.
The extraordinary events of 2020 have had a profound effect on virtually all markets around the globe and silver has been no exception. The metal’s supply/demand fundamentals, investment, prices, trade-flows and inventories have all experienced sensational fluctuations over the past 12 months or so, including a handful of historical records being achieved.
Global silver demand suffered a decline last year on the back of pandemic-related restrictions to economic activity, but is expected to climb this year, contributing to a rise in prices for the metal that may top 30%, according to a report from The Silver Institute released Thursday.
Annual sales of hydrogen fuel cell electric vehicles (FCEVs) could reach 4.6 million by 2030, especially as the cost of hydrogen starts to fall. In the short to medium term, platinum demand growth is likely to be driven by heavy duty and fleet FCEVs – trucks, buses and forklifts – with the market for FCEV passenger vehicles developing over the longer term as refuelling infrastructure for low-cost hydrogen rolls out.
John Hathaway, Senior Portfolio Manager: Defensive investment strategies are few and far between. Fixed income, debased by artificially low rates, no longer passes muster. Selling volatility to generate income seems like a form of insanity. Gold is the obvious answer. Whether in physical form or precious metals mining shares sporting good dividend yields and trading at depressed valuations, this unwanted investment strategy will prove seaworthy for all conditions.
Paul Wong, CFA, Sprott Market Strategist: Gold prices finished March at $1,708, closing off a difficult quarter on the heels of gold's positive, record year. COVID-19 vaccine rollouts in the U.S. encouraged market optimism which was reflected in rising U.S. Treasury yields and a strong U.S. dollar. Despite the cheerier economic outlook, the long-term risks associated with trillions of dollars of economic stimulus, and mounting debt, provide ample support for our bullish metals outlook.
Silver-backed Exchange Traded Products (ETPs), increased almost threefold to 331 million ounces (Moz), surpassing 1 billion ounces of silver in 2020.
Shree Kargutkar, Sprott Portfolio Manager: Platinum prices have moved higher as COVID-19 has constrained supply amid rising demand. YOY, spot platinum is up more than 90%. Growing interest among investors for platinum's role as a store of value has also boosted prices. We examine how the global pandemic has impacted platinum supply and demand, and offer our bullish outlook.
If you listen to gold pundits like John Hathaway, who has been investing as a gold specialist since 1998, there’s never been a better time to invest in gold mining companies. On a Sprott Gold Talk radio podcast on March 10, the managing director and senior portfolio manager of Sprott Gold Equity Fund declared that he has “never seen the values as compelling as they are right now.”
Poland’s central bank wants to buy at least 100 tonnes of gold -- worth some $5.5 billion at current prices -- over the coming years, as it continues to expand its bullion reserves, governor Adam Glapinski said in an interview published on Monday.
Ed Coyne, Senior Managing Director: 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 28%. Most other types of long-term capital gains are taxed at 15%-20%.
Although mining equities have dropped sharply since the start of the year, they are currently trading at a level that offers "real" value for investors, especially compared to the overheated general equity market, says Peter Grosskopf, CEO of Sprott. Grosskopf added that even with lower gold prices, mining companies are still expected to generate significant cash flow through 2021. "The well-run producers are a buy right now," he said. "They represent good cash-flow-back equity investments against any other stocks."
Paul Wong, CFA, Sprott Market Strategist: February was a tough month for gold. Bond selling spiked into near panic mode and triggered a multi-asset sell-off into month-end. It was an uncomfortable replay of the 2013 Taper Tantrum in condensed form. Gold was not spared, but long-term trends remain in place for our bullish gold view.
Gold, silver and other precious metals poured in to the U.S. as purchases of other overseas items dropped. Here's why.
At a time when America’s purchases of other overseas goods have ebbed, imports of gold, silver and other precious metals are surging, according to a USA TODAY analysis of the latest Census trade data.
Maria Smirnova, Sprott Senior Portfolio Manager: Silver climbed more than 47% in 2020, reaffirming its value as a safe haven portfolio asset during the COVID pandemic. But our bullish outlook for silver is based on its unique role as an industrial metal. Silver should be integral to any "green revolution" discussions, given that it is critical to the success of EVs, solar energy and 5G cellular networks. We believe that silver demand will likely explode in the next 10 years, and we don't foresee supply growth keeping pace.
Gold's unique attributes as a scarce, highly liquid, and uncorrelated asset demonstrate that it can act as a diversifier over the long term. Gold's position as an investment and a luxury good has allowed it to deliver average returns of nearly 11% over the past 50 years, comparable to equities and more than bonds and commodities. Overall, extensive analysis suggests that adding between 2% and 10% of gold to a U.S.-dollar-based portfolio can make a tangible improvement to performance and boost risk-adjusted returns on a sustainable, long-term basis.
Maria Smirnova, Senior Portfolio Manager at Sprott, explains that there are three key drivers of gold that are very important: 1) fiscal policy, 2) monetary policy and 3) geopolitical tensions. Smirnova explains that together these drivers indicate strong support for gold and silver.
Over the last week or so, we saw GameStop-inspired flash mobs turn their attention to silver, where they attempted to engineer a squeeze. It didn’t really work out.
Sprott Asset Management highlights (NYSE Arca:PSLV) surpassing 100 Million ounces of physical silver.
The recent rapid ascent of cryptocurrencies over the past year has captured the attention of investors. Often, investments in cryptos are equated to investments in gold. Despite some apparent similarities, we believe that gold stands apart from cryptocurrencies, both fundamentally and practically.
The United States Mint said on Tuesday it was unable to meet surging demand for its gold and silver bullion coins in 2020 and through January, due partly to pandemic-driven demand and plant capacity issues.
Paul Wong, CFA, Sprott Market Strategist: Gold started the year strongly, reaching almost $1,960 before dropping quickly back to support above the $1,800 range. We have been long-term bullish on silver, which has surged to an 8-year high. The Reddit crowd may accelerate this silver rally to extreme levels, but we can continue to make a strong fundamental case for silver that does not require any short squeeze schemes (real or imagined).
Silver broke above $30 an ounce as the precious metal took center stage in the retail investor frenzy sweeping through markets.
Silver prices shot up to their highest level in almost eight years Monday after Reddit traders turned their sights on the volatile precious metal, having prompted wild swings in GameStop Corp. shares last week.
Gold prices are slack to start 2021, but some commodities market observers believe that trend will reverse, prompting investors to return to gold exchange traded funds.
Gold started the new year trading lower for the first month of 2021. Peter Grosskopf, Sprott CEO, explains that "higher Treasury yields and the recent bounce in the [U.S. dollar], both of which rely on economic strength,” are the main short-term factors that have held gold prices back since the November U.S. election. Grosskopf believes that "markets are more dependent on government stimulus and money printing than they have ever been historically.”
In the battle against Covid-19, governments around the globe are on the cusp of becoming more indebted than at any point in modern history, surpassing even World War II.
John Hathaway, Sprott Senior Portfolio Manager: "The fate of the stock market and the outlook for gold are more intertwined than most realize. Gold has been performing well, but its outperformance is a well-kept secret. If a general bear market sets in, more investors will embrace gold and gold mining stocks. In the meantime, macroeconomic and valuation factors continue to build in gold's favor."
Ed Coyne of Sprott Asset Management and Steve Dunn of Aberdeen Standard Investments share their outlooks for gold equities, physical gold, and gold ETFs. They take a closer look at interest rates, the gold mining story, and the potential impact of a vaccine.
Gold has been used as a store of value for thousands of years and is a safe and easily understood asset that has enduring value, whether or not it competes with cryptocurrencies for attention.
A multi-year drive to reduce exposure to U.S. assets has pushed the share of gold in Russia’s $583 billion international reserves above dollars for the first time on record.
Paul Wong, CFA, Sprott Market Strategist: 2020 was a tremendous year for precious metals. Gold bullion gained 25.12%. Silver bullion rose 47.89%. Palladium climbed 25.86% and platinum increased 10.92%. Gold mining equities were up 21.96% and gold junior mining stocks rose 48.53%. We expect the precious metals rally to continue in 2021 and offer our Top 10 list for investors.
Gold's price advance of 2020 appears to be sustainable, McGlone said on Tuesday, noting that the current resistance of $2,000 an ounce will become the metal's support.
Gold is off to a good start in 2021 after recording its best yearly gain in a decade. Prices surged above $1,900 an ounce on Monday to the highest in almost two months as lower US real yields and a weaker dollar kept the yellow metal’s momentum up.
Gold continued its strong start to the year as lower U.S. real yields and a weaker dollar combined with surging coronavirus cases to boost demand for the haven asset.
Gold and silver’s rallies could continue into the new year.
The use of silver in the automotive industry is an area of demand that has gone almost unnoticed until quite recently. However, silver has played a role in the automotive sector going back many decades.
Shree Kargutkar, Sprott Portfolio Manager: As COVID spread in 2020, investors embraced gold and silver as portfolio protection. But the role of these metals extends far beyond this. We explore how precious metals are helping to medically combat the virus and identify several innovative disease-fighting applications that depend on gold, silver, platinum and palladium.
The good times for gold miners are expected to continue next year, especially for those that are able to tighten spending and increase returns to investors.
Ed Coyne joins Asset TV for a deep dive into gold and gold equities. Coyne shares his 2021 outlook and sheds more light on gold equities and what makes the junior mining story so attractive.
Shree Kargutkar, Sprott Portfolio Manager: There are several macro-economic reasons why gold may make the perfect gift for the holidays....including the $18 trillion of negative yielding debt in the world today, which is nearly equal to the size of the U.S. economy. Bonds are no longer a portfolio risk mitigator, and if you don’t hold some gold, silver and other precious metals assets, you should.
The mining specialist lost ground when COVID pushed investors to safe havens but he’s keeping faith in his mid- to small-cap bias. But, he believes a recovery is due.
Gold advanced after the Federal Reserve strengthened its commitment to supporting the recovery in the world’s largest economy, and U.S. lawmakers made progress on a stimulus package.
Sprott ETFs are highlighted among the best performing mining ETFs in 2020. Many investors see ETFs as a liquid and low-cost option for gaining exposure to this part of the gold industry.
CEO Peter Grosskopf: Investing in gold and silver mining companies is challenging but offers substantial rewards for investors with an edge. After two great performance years, in which gold mining equities outperformed the S&P 500 Index, these stocks are still relatively inexpensive. At Sprott, we rely on a broad team led by very experienced portfolio managers, in the fashion of a collective basket of mining DNA.
2020 has been a breakout year for precious metals. The uncertainty and risk-off sentiment created by the global COVID-19 pandemic have increased the luster of precious metals. Both gold and silver ETFs have enjoyed record flows. In this webcast, we explore the key benefits of precious metals investing in the current environment.
Even before the release of the next James Bond film -- “No Time to Die” -- Swiss watchmaker Omega is offering a platinum-gold version of the Seamaster Diver 300M that actor Daniel Craig wears when playing 007.
The long-term fundamentals of what drives gold prices higher, economic uncertainty and the fear of inflation, remain in place and will likely increase over time.
Paul Wong, CFA, Sprott Market Strategist: Precious metals took a post-election pause in November. Gold bullion lost 5.42% but is up 17.11% YTD and 21.38% YOY through November 30, 2020. Silver bullion lost 4.28% in November but has risen 26.84% YTD and 32.99% YOY. The macroeconomic fundamentals remain intact to support a continuation of this year’s precious metals rally. We see this correction as an attractive yearend, seasonal buying opportunity.
Citibank analysts say they expect gold to average $2,100 an ounce next year and $2,200 in 2022.
Most investors think the precious metal protects against faster inflation or a plunge in stocks. Not so.
This edition of Platinum Quarterly considers platinum supply and demand developments for the third quarter of 2020 and provides an updated outlook for 2020, it also presents the first forecast for 2021.
Tom Bodrovics, a host of Palisades Gold Radio, welcomes returning guest John Hathaway of Sprott. Hathaway says, “the setup for gold is so incredible. It's the best I've seen it in my 20 plus years of gold investing.” Hathaway explains why traditional portfolio weightings no longer work, given that bonds today are "return-free risk". Gold can provide an alternative to bonds, and Hathaway explains how a relatively small move in the gold bullion price can have an outsized impact on gold miners' profit margins and the value of their stocks.
Silver now holding in a higher range, despite recent weakness. The relationship with base metals has strengthened recently, but the gold-silver dynamic continues to dominate.
The Silver Institute hosted a webinar today to discuss its annual Interim Silver Market Review. Philip Newman, Managing Director at Metals Focus, and his colleague, Adam Webb, Director of Mine Supply, presented the findings. The Interim Review features historical supply and demand statistics and provisional estimates for 2020.
The current macroeconomic environment makes gold a core portfolio holding for two reasons. First of all there is increased risk of inflation and the general decline of the US dollar. Second, gold tends to do best in times of turmoil.
Sprott ETFs own large-cap and smaller mining shares. These two exchange-traded funds (ETFs) are up notably so far this year.
With a year-to-date return of close to 30% up to the beginning of September, including a short spike beyond the USD 2,000-mark for the first time in history, gold has performed exceptionally well in 2020.
Silver prices have risen in the first half of the year, breaking through to a high of uS$18 in late summer. What is the impetus that has pushed the investment into silver this year and where do you see prices settling as the global recovery from CovID-19 continues?
In the last few weeks, we have seen silver and gold slowly meandering with no real sense of direction. It looks to me like this is a "bullish consolidation", and within the next few weeks, months, and even years, I am expecting much higher levels from both gold and silver.
Gold touched a six-week high and copper advanced for a fourth straight session, boosted by a declining dollar and the outlook for further central-bank stimulus as investors await the final outcome of the U.S. presidential election.
Paul Wong, CFA, Sprott Market Strategist: With building anxiety over the U.S. presidential election, investors stepped away from markets in October, including gold bullion and mining equities. The uncertainties of the election and COVID-19's surging second wave have created a "risk mitigation" type market. The gold bull market remains intact and both gold bullion and mining equities are well-positioned under most plausible election scenarios.
Stephanie Pomboy and Grant Williams, hosts of the podcast Super Terrific Happy Hour, interview a true legend of the precious metals industry, John Hathaway on October 28.
A new year – thankfully – quickly approaches, which means an avalanche of market predictions is soon to cascade across Wall Street. So, let’s jump the line and get ahead of the crowd: 2021 could well be the Year of Gold.
Whitney George, Chief Investment Officer: With gratitude for a career on Wall Street that has spanned more than 40 years, I have experienced plenty of history. Looking back for an analog to this past year, in many ways, 1968 was a year on par with 2020. As a society, we survived and were able to move forward and grow from the experience, and we benefitted from positive investment lessons learned in the aftermath of 1968. This too shall pass.
John Hathaway, CFA, Senior Portfolio Manager: The current pullback in the precious metals sector is a buying opportunity. It is possible that gold and gold mining shares could continue to chop sideways-to-lower until the U.S. presidential election results are known and even into yearend as the implications are sorted out. We believe that now is the time to start layering in gold exposure, not when the rest of the world tries to do so.
In brief: in a world of ongoing pressure for policy makers across the globe to print and spend, zero interest rates, tectonic shifts in where global power lies, and conflict, gold has a unique role in protecting portfolios.
Paul Wong, CFA, Sprott Market Strategist: Markets experienced the first post-COVID meaningful correction in September as investment fund exposures were reduced, resulting in a contraction in market depth and liquidity. Despite September's profit taking, gold bullion posted its eighth straight quarterly gain. We see this as a buying opportunity for precious metals investors.
In the last six weeks, after a huge run, gold has been consolidating. It got up to like, $2,070 and really broke down and hit as low as about $1,848, where it was trading last night in Asia. Over the last six weeks, I’ve more than doubled my gold position.
Industrial metals posted gains in the third quarter, with silver up sharply and copper touching its highest prices in over two years, suggesting that the worst of the coronavirus hit to the economy may be over.
JPMorgan according to Bloomberg is set to pay a record $1 billion settlement to resolve market manipulation investigations by U.S. authorities into its trading of metals futures and Treasury securities.
Today, the World Gold Council released a new report Gold Mining’s Contribution to the UN Sustainable Development Goals, which looks at the significant contribution the gold mining industry makes to social and economic development. The report includes 39 case studies on how our Members are bringing about positive change across four thematic areas: global partnerships; social inclusion; economic development and responsible energy use and environmental stewardship.
Learn more about Sprott's commitment to ESG.
A coalition of gold investors, including firms backed by billionaires John Paulson and Naguib Sawiris, is urging changes at miners as performance “continues to fall short” in some areas even as prices rise.
“We are honored to be added to the S&P/TSX composite index and ranked in the TSX30 program,” said Peter Grosskopf, CEO of Sprott. “Both of these milestones are recognition of Sprott’s achievements over the past three years and I would like to thank our employees and board of directors for their contributions to the Company’s success. The fundamentals are in place for a long bull market in the precious metals area and we look forward to continuing to deliver outstanding results to our clients and shareholders.”
John Hathaway, Managing Director, Senior Portfolio Manager, Sprott Asset Management, speaking with Dean McPherson, Head of Business Development, TMX Group, who opened the discussion asking how long the current gold bull market would last.
Paul Wong, CFA, Sprott Market Strategist: After touching a record high of $2,075 on August 7, gold bullion closed August at $1,968. Despite this pullback, we see gold well supported above the prior cycle high of $1,900 as it settles into a sustainable $2,000-$2,200 trading level. Both silver bullion and gold mining equities reached multi-year highs in August.
Gold is rebounding, with Comex futures climbing back to $2,000 an ounce, as the dollar extended its slump and investors bet U.S. interest rates would stay lower for longer.
In my coverage of the Sprott Physical Gold and Silver Trust (CEF) back in May, I shared various supporting ideas that justified the fund as a buy. The central thesis was, as a bullion-backed fund, CEF would move up naturally purely because of a bull move in the precious metals.
CEO Peter Grosskopf: Gold has powered over $2,000, and we take stock of what has been accomplished by the monetary metal and what may lie next. It has now been established as a baseline that a diversified asset portfolio must include an allocation to gold. No other liquid asset accomplishes what gold does in the way of portfolio insurance and purchasing power protection.
Silver has always shown its value throughout history. From ancient coins to its use as a global currency during the Age of Discovery, silver has circulated the world to become an important financial asset. Its value continues to shine in the era of the modern finance industry.
Maria Smirnova, Sprott Senior Portfolio Manager: The economic fallout from COVID-19 has created a predictable headwind for jewelry purchases around the globe. However, given that jewelry is deeply rooted in cultural norms and traditions, we anticipate a healthy rebound in jewelry purchases over time, driven by the role that it plays in societies and a strong desire to resume “normal life” among most buyers.
Sprott CEO Peter Grosskopf has long fielded the same question while talking up gold to investors: Why does famed investor and multibillionaire Warren Buffett, the so-called Oracle of Omaha, hate the yellow metal? Grosskopf may never have to answer the question again. After years of trashing gold, Buffett’s Berkshire Hathaway Inc. revealed it had switched course and purchased 20.9 million shares in Toronto-headquartered Barrick Gold Corp. in a transaction worth an estimated US$563.5 million at the end of the second quarter. Grosskopf responded, “I think that now he seems to have come around to the fact that he can be comfortable with gold as a store of value.”
So far this year, investors in gold and silver have made out like bandits, especially when you compare the returns of the world’s two best-known precious metals with those of stocks.
Even as it reaches new highs, we don’t think it’s time to grow concerned about the price of gold, or gold equities. Here’s why.
Silver is set to outshine gold, even as prices of both precious metals soar in the midst of a faltering global economy and a weakening U.S. dollar.
Spot gold soared to a record above $2,000 an ounce as investors continue to seek a haven for their assets amid daunting economic and geopolitical risks.
Record-setting gold prices may have created bullish investment opportunities in gold miners but their appeal will be put to the test this earning season as investors scrutinize their ability to stay disciplined.
Paul Wong, CFA, Sprott Market Strategist: The precious metals complex set off fireworks in July as gold bullion reached all-time highs. Silver bullion and gold mining equities broke through significant long-term resistance levels to further improve their bullish standing. Year to date, precious metals continue to outperform as gold has attained “escape velocity”, i.e., it has gravitationally moved away from other asset classes.
In the past decade, a traditional 60/40 portfolio of stocks and bonds, as represented by the S&P 500 index and long-term government bonds, was a winner. But with U.S. bond yields moving toward zero or even negative territory, it may be time to rethink that mix. One thought: How about swapping out some bonds for gold?
Investors have focused on a rise in record prices for gold, but silver’s up about 25% in July — the metal’s second-biggest monthly gain on record — and it’s still undervalued compared with the yellow metal.
Gold’s surge to an all-time high is winning over a wider fan base of pension funds, insurance companies and private wealth specialists. Managers who run long-term portfolios worth trillions of dollars are taking interest in gold as they search for returns in a yield-starved investing landscape.
Dr Graham Birch joined the Sprott Board of Directors as Director in November 2019. He has in-depth experience in asset management, especially in precious metals, having been responsible for gold and mining investments at BlackRock in London. He was also a Director of ETF Securities, which pioneered the development of precious metals ETFs in Europe. Graham has just written a book about the historical origins of the bullion in Britain’s coins, with lessons in it for those who wish to understand the importance of gold and silver as money in a world of paper currencies. The following essay teases out these lessons.
In an interview with Kitco News, Peter Grosskopf, chief executive officer at Sprott Inc, said that gold has enough momentum to push to $2,000 an ounce before there is a significant consolidation period.
The U.S. Mint has reduced the volume of gold and silver coins it’s distributing to authorized purchasers as the coronavirus pandemic slows production, a document seen by Bloomberg shows.
In an interview with Kitco News, Peter Grosskopf, chief executive officer at Sprott Inc. said that he doesn’t expect any new Fed member to have much impact on the future direction of interest rates as rising debt gives the central bank little room to maneuver.
Gold prices have soared to a record high, with investors rushing to find safe places to park their money as concerns grow about a resurgence in the coronavirus and the impact that could have on the global economy.
In the morning of Asian trading hours on Monday, spot gold traded at about $1,931.11 per ounce after earlier trading as high as $1,943.9275 per ounce. Those levels eclipsed the previous record high price set in September 2011.
Gold’s unrelenting march higher shows no signs of slowing after a plunge in the dollar swept prices past the previous high set in 2011 and put the metal on track for even bigger gains. Bullion’s surge came as a gauge of the U.S. currency sank to the lowest in more than a year, the latest in a long line of bullish factors -- including negative real rates in the U.S. and bets the Federal Reserve will keep policy accommodative when it meets this week -- that are pushing prices ever higher.
Sprott CEO Peter Grosskopf on Gold's Breakthrough and ascent towards $2000/Oz.
It’s not only gold that glitters. Since touching its weakest level in more than a decade in March, silver has doubled to a seven-year high of almost $23 an ounce. Partly, it’s a rally fueled by the same low-yield, weak-dollar haven dynamic that has pushed bullion to within spitting distance of a record. Investor demand is booming and silver — which is the best conductor of electricity — has industrial uses, too. Short-term supply, meanwhile, has been dented by pandemic-related closures. The metal can keep shining.
Deepening negative real yields in the U.S. Treasury market are fueling a frenetic rally in gold that’s boosting the precious metal toward a record. Bullion has gained 24% this year and is about $45 from an all-time high.
Gold has long been a mainstay in times of inflation—or any crisis, really. And for good reason: it does tend to beat stocks and bonds in a collapse, as the folks at Sprott Asset Management remind us
Silver surged to the highest in almost seven years and gold continued its march toward a record on expectations there’ll be more stimulus to help the global economy recover from the coronavirus pandemic.
John Hathaway, Sprott Senior Portfolio Manager: We believe that the macro forces for gold and gold mining stocks have coalesced into what may be one of the 'fattest investment pitches' of our time. A fat pitch is a momentary event, akin to catching a major trend change in the financial markets. Such opportunities do not come around often. They deserve serious consideration and expeditious response.
“Silver was long due for a catch-up with gold,” said Peter Grosskopf, chief executive officer at Sprott Inc. “As a much smaller market, once investor interest enters in size, its supply side gets swamped.”
Gold has surged due to the pandemic — and it could keep going. Here’s what to know about investing now
As global stock markets tick further into unchartered territory, another asset class has been catching investors’ eyes: Gold. Gold prices inched higher earlier this month to trade over $1,800 per ounce, crossing a major psychological milestone not reached since 2011.
Bullish factors building in the gold market are set to see prices take out the record set in 2011, according to Citigroup Inc. The metal is benefiting from loose monetary policy, low real yields, record inflows into exchange-traded funds and increased asset allocation, the bank’s analysts including Ed Morse wrote in a report. Gold is expected to climb to an all-time high in the next six-to-nine months, and there’s a 30% probability it’ll top $2,000 an ounce in the next three-to-five months.
There’s a big shift in the balance of power in the global gold market. A relentlessly expanding physical hoard of bullion stored in London and New York means exchange-traded funds have usurped managed money in the futures market as the key driver of the price of the shiny metal.
This gold rally has been nothing short of historic and investors and analysts are betting it's far from over
Gold’s rally has been nothing short of historic, but 2020’s rush is still far from over, according to the investors who bought into it and the analysts being forced to continuously change their price targets.
“I guess gold is the real bitcoin,” Schlossberg joked on CNBC’s “Trading Nation” on Wednesday. “Ultimately I think what’s happening is the market is taking implicit bets that inflation is starting to pick itself back up, and I think there’s a really good reason why the market thinks so.”
Gold’s allure is only getting stronger as 2020 unfolds. Spot prices reached $1,800 an ounce and year-to-date inflows into bullion-backed exchange-traded funds topped the record full-year total set in 2009.
These are strange times on Wall Street. Stocks are surging on optimism about a potential economic rebound. Yet investors are still very nervous about the growing threat of a second wave of Covid-19 cases in the United States.
Gold miners’ share prices are soaring with the value of the precious metal, while increased dividends are helping push these stocks higher still.
The rising precious metals prices since March have buoyed the mining sector, which have begun to see sharp upward ticks across many popular mining funds. We will look at several of them to get an idea of the returns investors have had over the last couple of months.
Paul Wong, CFA, Sprott Market Strategist: Gold bullion continued to deliver strong performance and was up 17.38% YTD through June 30, 2020, and 26.36% YOY. At the same time, gold mining equities have gained 25.88% YTD, and 44.00% YOY as of June 30. This compares to -3.08% YTD and 7.51% YOY returns for the S&P 500 TR Index. Silver posted strong gains in June and is on the move again; silver is up 1.99% YTD and 18.88% YOY as of June 30.
As the coronavirus pandemic pummeled demand from key customers in the auto industry, Russia’s biggest mining company quietly tightened its grip on the palladium market.
Gold headed for the biggest quarterly advance since 2016 amid a surge in demand for haven assets due to the coronavirus outbreak, which shows no signs of abating.
Peter Grosskopf, Sprott CEO: "On the eve of Sprott's planned listing on the NYSE, I thought it appropriate to take stock of our history and the decade of my tenure as Chief Executive Officer of the firm."
There are a number of great ways to hedge one’s portfolio. Among them is one method I’ve been very vocal for a long time. Gold has value as a portfolio hedge over the long term. Deciding exactly how to initiate a gold position is a key question many investors have.
Gold edged toward the highest since 2012, supported by concerns over a second wave of coronavirus infections and China’s move to tighten oversight of Hong Kong.
Ending a sleepy summer week, traders managed to reach a major landmark. The 10-year real yield (as shown by Treasury Inflation Protected Securities, or TIPS, and which can also be expressed as the nominal yield with the breakeven rate of inflation subtracted) dropped to a new low for the year. At below -0.6%, it was also a fresh nadir since the so-called taper tantrum of 2013.
As stock markets roar back from the coronavirus-led rout, advisers to the world’s wealthy are urging them to hold more gold, questioning the strength of the rally and the long-term impact of global central banks’ cash splurge.
Silver has been on the move since April, although it is still playing catch up to gold in this year’s precious metals rally. We identify four long-term consumer-driven trends that are positively driving demand for silver, including solar energy, battery-electric vehicles (BEVs), 5G cellular connectivity and antimicrobial applications.
Peter Grosskopf, CEO of Sprott discusses the positive environment for gold and gold equities, following the Fed's dovish interest rate outlook at its June 10 FOMC meeting.
The Federal Reserve is not looking to raise interest rates from its zero-bound target for the next two years and according to Peter Grosskopf, CEO of Sprott Inc., this is now the time for investors to be aggressive in the gold market.
Economist David Rosenberg believes that investing in a post-pandemic world is shifting our focus from what we want to what we need. Households and businesses are reassessing the importance of savings, liquidity and balance sheet health. Gold has been a "winner" during this crisis.
In the 20th century, the range has changed so that one ounce of gold trades for about fifty to eighty ounces of silver. As of the time of writing, it takes 97.20 ounces of silver to purchase one ounce of gold. Thus, silver appears to be historically cheap relative to gold.
Covid-19 is accelerating many trends that were already in existence. The rising gold price is one such trend. These seven charts, says Dominic Frisby, reveal why gold could soon “go bananas”.
Paul Wong, CFA, Sprott Market Strategist: After a tumultuous past few months, every asset class appears to be normalizing, including gold bullion. Gold posted steady gains in May with a 2.6% increase. Gold is up 14.04% YTD through May 31, 2020, and 32.54% YOY. At the same time, gold mining equities have gained 18.26% YTD, and 61.70% YOY as of May 31.
The price of gold peaked at $1,900 an ounce in September 2011. Nine years and many radical monetary-policy experiments later, it trades at $1,702. That it ought to move higher, and will move higher, is the theme of this analysis.
In a broad market rally this month driven by optimism over a potential coronavirus vaccine, the reopening of the economy and a massive stimulus, small-cap stocks have outperformed. This is especially true as the Russell 2000 Index has risen nearly 7% in a month compared with a gain of 4% for the S&P 500.
Wall Street has been performing impressively with the major indices climbing to a 12-week high. The rally was mainly powered by optimism over a potential coronavirus vaccine as well as an uptick in the economic activities as lockdown measures loosen. Notably, the S&P 500 is up 38.2% from the March lows while the Dow Jones has gained 28.3%.
This year’s 14th edition of our In Gold We Trust report, titled “The Dawning of a Golden Decade”, is being published at the opening of a new decade. As the last decade draws to a close, gold has once again demonstrated its sensitive seventh sense and alerted the keen observer that the general situation in the financial markets is about to change fundamentally.2
Gold miners have climbed steadily, following the positive path we predicted back in November 2019. As of April 30, 2020, gold mining stocks were up 13.81% YTD and 58.67% YOY, compared to -12.36% YTD and -7.91% YOY for the S&P 500 Index. In our view, gold mining equities still have a great deal of upside to offer, given that historically gold stocks tend to outperform the metal during gold bull markets (2-3x).
The most significant supportive factor for gold is the “amount of debt being created to fund the various global monetary and fiscal deficits,” says Peter Grosskopf, chief executive officer at Sprott Inc.
The stock is still underappreciated given the growth we have seen and what I expect we will continue to see going forward. Sprott has made a couple of strategic acquisitions over the last few years, and divested a significant part of the non-precious metals assets, which has positioned them perfectly for the current environment.
Gold is one of this year's best performing commodities and that's a theme that could extend as exchange traded fund demand swells and as central banks debase currencies.
Jim Grant in his May 15 Interest Rate Observer discusses gold mining equities with Senior Portfolio Manager John Hathaway, who opines: “Gold shares, in relation to bullion, are the cheapest they’ve been in his 20 years. What astonishes me—I’m an old value investor—is that so many companies are generating free cash flow, and it is not hard to find companies with free cash flow yields of 10% or better.”
Forced into record spending by the threat of another Great Depression, policy makers are blurring the lines between borrowing the money they need and simply creating it.
Sprott President Whitney George discusses how he applies his "value" investing approach during this crisis with John Heins, President and Editor-in-Chief of Value Investor Insight.
Barrick CEO says there’s rising demand for gold as a ‘self-funded insurance policy’ in a global crisis
As gold prices climb back towards their all-time highs, Barrick Gold CEO Mark Bristow sees his industry providing certainty during an uncertain crisis.
Paul Wong, CFA, Sprott Market Strategist: Gold equities broke out of a multi-year resistance level on massive buying flows in April. Gold miners may be experiencing disruptions due to COVID-19 pandemic shutdowns, but they stand to benefit from a rising gold price. Gold bullion is up +11% YTD and +31% year-over-year (through April 30, 2020).
Gold prices could “break the highs” seen earlier this year, after declining in March along with assets across the board, according to UBS Investment Bank’s Joni Teves.
CEO Peter Grosskopf: "We propose that gold is not only a financial hedge to government monetary and fiscal policies, but it is also a mandatory portfolio and household diversification asset....Gold is first and foremost, a store of value. We believe there is fundamental support for a qualified currency to exist outside of government-led debasement. Gold is more legitimate and efficient than any other alternative currency."
Gold’s bullish run after the 2008 financial crisis seems to be repeating itself and can no longer be ignored by Canadian generalist investors, CIBC said in a note.
“If gold is not correctly priced for what has transpired and what lies ahead, gold mining stocks are even more inappropriately priced,” Hathaway said in a recent Sprott report.
The COVID-19 crisis has already had a profound impact on silver supply, demand and prices, something we expect will continue for some months to come.
Don’t be fooled by the massive upside swings we’ve had in recent weeks, interspersed between serious daily declines, as evidence we’ve “bottomed.” I really don’t think we’ll see a true bottom until the end of this year (at the earliest) or 2021 (more likely).
“Gold is a way of going long on fear,” renowned investor Warren Buffett once said. The Berkshire Hathaway CEO explained that if people “become more afraid, you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything.”
Central-bank balance sheets are expanding to record levels amid their latest buying spree, raising questions about how big they can get and whether those assets can ever be sold back to markets.
Investors are rushing to put their money into gold as the coronavirus pandemic roils markets worldwide, with one asset manager reporting demand dwarfs the spike seen during the last financial crisis.
John Hathaway, Senior Portfolio Manager: "Gold is on the cusp of breaking out to all-time highs in U.S. dollars and has already done so in virtually every other currency. Gold mining stocks continue to lag the metal and, in our opinion, represent a compelling investment opportunity. The COVID-19 pandemic panic was merely the black swan that punctured a financial market asset bubble that took almost a decade to inflate."
There is now an ETF out there that allows investors to benefit from owning physical gold without having to incur the headaches and costs of insurance and storage. These costs are baked into the MER of the ETF.
Gold shares sank 2% after President Trump revealed a three-phase plan to reopen businesses. Sprott CEO Peter Grosskopf joins Yahoo Finance’s On The Move to discuss the state of precious metals amid the coronavirus outbreak.
The silver market is in the throes of several changing trends as the COVID-19 pandemic upends the global economy. When the dust settles, we see a bullish case for silver prices, as investment demand ticks upward while supply constraints linger.
Gold could top $2,000 an ounce and will remain elevated over the next five years as the global economy contends with the impact of the coronavirus pandemic, according to the head of Newmont Corp., the world’s top miner of the precious metal.
The clamor for retail investors to get hold of precious-metals coins is about to get more urgent. The U.S. Mint said Wednesday it’s temporally halting production at its West Point facility in New York because of the risk to employees from the coronavirus. The site makes gold, silver, platinum and palladium coins which are sold through a network of distributors.The shutdown comes as convulsive swings in financial markets spur a surge in demand among retail investors for precious metals as haven assets.
“I think it’s important to say now that the wind is very likely in gold’s sails,” Rick Rule, president and CEO of Sprott, a U.S. investment manager specializing in precious metals, said in a note to investors Thursday, suggesting that the macro factors strongly favor gold.
Gold hit a new seven-year high Monday, with bullion stocks moving sharply higher as U.S. futures briefly topped US$1,770 per ounce.
Gold prices have pushed to nearly an eight-year high, and this is only the start as investors should keep an eye on the precious metal's long-term outlook, according to one gold fund executive.
Gold’s performance in the weeks since Covid-19 became a pandemic has been anything but stellar. Prices were volatile, briefly turning lower for the year before climbing to their highest level since late 2012.
Gold ends at highest since October 2012 as dollar declines on the back of the Fed’s new lending plans
Gold futures rallied to settle at their highest level in seven-and-a-half years on Thursday, getting a boost as the U.S. dollar declined on the back of the Federal Reserve’s new lending plans which aim to support the hit to the economy from the coronavirus pandemic.
Rick Rule, President & CEO, Sprott U.S. Holdings provides a timely primer on gold's place in investor portfolios: "I think it’s important to say that the wind is very likely in gold’s sails. The macro set of circumstances strongly favors gold."
Paul Wong, CFA, Sprott Market Strategist: March 2020 will go down in history as one of the most tumultuous ever for capital markets. For the first time in over 100 years, a global pandemic has struck with devastating results. Gold continues to deliver strong relative performance and was up 3.95% on a year-to-date basis through March 31, 2020, compared to -19.60% for the S&P 500 TR Index. The need for a safe haven asset like gold, that represents a store of value during crises has never been greater.
The coronavirus outbreak has not spared anyone. It’s not just growth stocks; defensive stocks such as utilities and consumer staples have also been equally weak in the last few months. However, in my view, the last reliable resort to take shelter in these uncertain times is the traditional safe haven: gold.
The coronavirus outbreak has been playing foul on Wall Street over the past month, sending broad indices into a tailspin, thus raising the appeal for gold, which is considered a great store of value and hedge against market turmoil. Notably, gold price jumped nearly 9.5% last week, representing the biggest weekly rise since September 2008.
It is one thing to be a physically-backed metal fund and another to be a redeemable physically-backed one. Because physical metal is trading at such a premium today, this is a huge added benefit to Sprott funds over other ETFs.
Jason Mayer, Senior Portfolio Manager, recaps the past two weeks: "We were not surprised by the recent selloff in gold bullion and precious metal equities.
If you think gold GC00, 0.594% has jumped about 10% in a couple of days to $1,638 an ounce, the official price quoted on Wall Street, think again. The real price? Nearer $1,800. If you can get it. “There’s no gold,” says Josh Strauss, partner at money manager Pekin Hardy Strauss in Chicago (and a bullion fan). “There’s no gold. There’s roughly a 10% premium to purchase physical gold for delivery. Usually it’s like 2%. I can buy a one ounce American Eagle for $1,800,” said Josh Strauss. “$1,800!”
From South Africa’s ultra-deep mine shafts to vaults underneath London, from metals traders in New York skyscrapers to main-street sellers of coins: the global gold market is being tested like never before. The cracks are starting to show. Worldwide panic over the coronavirus outbreak and a flood of stimulus by central banks has ignited demand for one of humanity’s oldest methods of storing wealth.
Ludwig Karl is stuck at home, worried about his elderly relatives. All the while his business is booming. He’s a board member of Swiss Gold Safe Ltd., an operator of high-security vaults in the Alps that’s storing growing sums of precious metals for wealthy foreigners as the Covid-19 pandemic worsens. The company usually helps customers buy gold, but governments have closed scores of businesses amid the crisis, making it increasingly difficult for people to get their hands on the physical product.
Whitney George reflects on markets and the COVID-19 crisis: "We are in a paradigm shift right now, one that may have taken us all a bit by surprise. I expect that central banks will shortly provide the liquidity required to settle the markets, an accomplishment that will be very favorable to gold."
Gold’s one-day dollar surge is one for the record books. But as bullion deliveries hit a snag and mining operations slow, the precious metal may soon see prices rally to new heights.
Now’s the time to buy gold, according to one of the world’s leading wealth managers, which flagged bullion’s prospects after the haven lost out to the dollar in recent weeks as the pandemic roils markets.
We think gold has been sensing the endgame for Keynesian policy prescriptions, mainstream economic thinking and hyper-leveraged investment practices....At the moment, mining company valuations appear extraordinarily cheap. It is one of the few industries that will report solid year-over-year earnings gains for the remainder of this year and perhaps into the next. Buying low is never easy but now is the time to do it.
"As events unfold, it is vital that we communicate what Sprott is doing as we navigate the uncertainty caused by the COVID-19 outbreak. We remain committed to our employees and clients throughout this challenging period. We have weathered many such periods in the past, and we are confident that our depth of experience and dedication will see us through."
The massive sell-off in equities is forcing investors to cash in gains in gold to cover losses in the stock market. The precious metal was poised for its biggest weekly gain in the futures market since 2008 before prices fell Friday. The S&P 500 pushed its two-day rout to about 5%, while sovereign bonds signaled the world is in crisis mode as policy makers struggle to contain the economic fallout from the coronavirus.
Paul Wong, CFA, Sprott Market Strategist: The Fed made a surprise interest rate cut of 50 basis points on Tuesday, March 3, and gold bullion closed the week higher, above $1,670. This follows gold's February breakout from the critical $1,585/$1,600 overhead resistance range that we have highlighted for several months.
“The flows into gold are just getting started,” says Peter Grosskopf, Sprott CEO. “Gold is now being seen as mandatory portfolio insurance and not a fringe asset." Grosskopf says the growing demand and chart patterns point to gold hitting $2,000 an ounce. He argues that the Fed’s rate action [lowering rates by 50 basis points] failed to lift stocks Tuesday because financial markets have entered a “vicious cycle.”
Some commentators have been asking the question if gold is the great safe-haven that it’s made out to be, then why have we seen the price falls that we’ve witnessed over recent days? To answer that question, let’s firstly take a look at the performance of spot gold over the past 12 months.
In times of coronavirus panic, even havens can be unreliable. Gold closed off February on a tarnished note, ending last week with its steepest daily decline since 2013. As financial markets panicked over the spread of the pneumonia-like illness, stocks tumbled and dragged gold and other precious metals lower.
John Hathaway, Senior Portfolio Manager: "Last week’s selloff created an extraordinary buying opportunity. We believe that even a small, incremental increase in investor focus and capital flows will drive the low valuations of precious metals mining shares considerably higher."
Even with gold at seven-year highs, there’s still room for more gains if history is anything to go by. Prices have surged this year as haven-seeking investors pour in. Markets have been shaken by worries that the coronavirus outbreak will cripple global growth, coupled with expectations for looser monetary policy around the world. Assets in bullion-backed exchange-traded funds are at the highest ever and money managers are holding a near-record bullish bet.
The coronavirus was the shock that gold was waiting for before moving to higher levels with charts now pointing to an eventual breach of $2,000 an ounce, according to Peter Grosskopf, CEO of Sprott Inc.
Part two of the Silver Series outlines some of the key supply and demand indicators that precede a coming gold-silver cycle in which the price of silver could move upwards.
Ed Coyne, Sprott Senior Managing Director, joins financial journalist Liz Claman to review gold's bold move in 2019. Coyne shares Sprott's 2020 outlook for gold bullion and gold equities, and explains that attitudes are shifting: Investors have traditionally invested in gold as a complement equity portfolios, but now view the yellow metal as an alternative to cash and bonds.
Gold began to shine in 2019 and continues to climb in 2020. We believe we are in the early stages of this gold rally, and discuss our bullish 2020 outlook and explain why investor interest in gold and gold stocks will likely continue to grow.
Maria Smirnova, Senior Portfolio Manager, provides insightful answers in Assay’s recent Q&A: “We have been gold and silver bulls for a long time. Our belief in the metals stems from their value as hard assets and financial asset diversifiers. We see rising deficits and higher debt levels around the world, and we see central banks globally having expansionary monetary policies. I call it a ‘race to the bottom.’”.
Palladium prices continued their relentless charge uphill Wednesday, shattering their old record high in a market that remains tight due to strong auto-related demand, analysts said.
Having surpassed the key $1,600 mark, gold prices were flirting with a seven-year high on Wednesday, as investors continue to shore up their positions amid the coronavirus outbreak.
The Silver Institute believes that macroeconomic and geopolitical conditions will remain broadly supportive for precious metals, encouraging investors to stay net buyers of silver overall, a development that should lift silver prices higher this year. Additionally, we see continued growth in physical silver investment, and forecast silver’s use as an industrial metal will rise in 2020.
U.S. authorities that accused six JPMorgan Chase & Co. employees of rigging precious-metals futures are building a criminal case against the bank itself, two people familiar with the situation said.
Paul Wong, CFA, Sprott Market Strategist: Gold bullion rallied 4.7% in January, on the heels of 2019's 18.31% rise. Our 2020 Top 10 Watch List outlines what gold investors should pay attention to given our long-term bullish outlook for the precious metals complex.
Gold is poised to perform strongly in 2020, with geopolitical risk set to remain elevated, metals and mining research and consultancy group Wood Mackenzie said Tuesday. Miners are set to enjoy bumper margins and the trade-off between investing for the long-term and returning money to shareholders will be acutely apparent.
Stocks have returned to rally mode, but three defensive plays could be undermining the bull case. Treasurys, utilities and gold — typically safe havens — have surged this month and outperformed the S&P 500.
Palladium prices are likely to remain strong despite news that Russian producer Norilsk Nickel will release three metric tons of palladium ingots from its stockpiles, traders and analysts said.
John Hathaway, Senior Portfolio Manager: "Going forward, unless the Fed continues to expand its balance sheet, it risks a meltdown in equity and bond prices that could exceed the damage of the 2008 global financial crisis....With continued advances in gold prices in 2020, the return potential for gold mining shares — the still unloved orphans and pariahs of the investment universe — should prove to be very compelling."
The fast-spreading coronavirus has affected most corners of the broad market. In particular, airlines, casinos, cruise lines and leisure companies have been hit hard....However, a few still stood tall amid the turmoil....Gold stocks jumped on rise in gold price, which is often viewed as a store of value and a hedge against market turmoil....We have highlighted one ETF [that is] performing well amid the coronavirus scare. This gold ETF follows the Solactive Gold Miners Custom Factors Index, providing exposure to large-sized gold companies whose stocks are listed on Canadian and major U.S. exchanges.
As palladium’s record-breaking rally makes guessing the size of stockpiles more important than ever, one thing at least is clear — they’re getting a lot smaller.
The bull market in gold and silver began in the early 2000s. After rising to highs of $1920.70 and $49.82 in 2011, both precious metals pulled back to lows of $1046.20 and $13.635 in December 2015. Gold and silver have been consolidating since reaching those lows.
“You have to have balance ... and I think you have to have a certain amount of gold in your portfolio,” Dalio said, reiterating his call last year that the precious metal will be a top investment in the years to come
Sprott Inc. (TSX: SII) announced today that it has successfully completed its previously announced acquisition by Sprott Asset Management LP of Tocqueville Asset Management LP gold strategies. Sprott estimates that its AUM as of January 17, 2020, is approximately C$14.8 billion (US$11.3 billion) (unaudited), an increase of approximately 40% from December 31, 2018.
Paul Wong, CFA, Sprott Market Strategist: 2019 marked the best performance for the precious metals complex in nearly a decade. Gold bullion closed the year at $1,517 (gaining 18.31% for the 12 months). Silver bullion ended the year at $17.85 (up 15.23% in 2019). Platinum climbed 21.56% in 2019, and palladium soared 54.24%. Gold mining equities showed notable strength, finishing 2019 up 43.49%,
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In partnership with ALPS Advisors, Inc. and ALPS Distributors, Inc. Sprott offers two gold mining ETFs. The Sprott Gold Miners ETF (NYSE Arca: SGDM) and the Sprott Junior Gold Miners ETF (NYSE Arca: SGDJ).