April 20, 2026 | (5 mins 47 secs)
Gold may be facing short-term volatility amid geopolitical tensions, but its long-term outlook remains compelling, supported by strong fundamentals and persistent demand. In this interview on April 20, Shree Kargutkar explains why constrained supply, limited new discoveries and rising prices are creating a powerful backdrop for gold and mining equities. For investors willing to look beyond near-term noise, the sector may offer significant upside opportunities as structural imbalances continue to build.
Video Transcript
Lindsay Biscaia: Gold prices slipped today, even as oil prices surged amid continuing tensions between the U.S. and Iran. For more on the impact of the Iran war on this sector and investment opportunities, joining us now is Shree Kargutkar, Senior Portfolio Manager at Sprott Asset Management. It's great to have you join us. Thanks so much.
Shree Kargutkar: Great to be on. Thank you for having me.
Lindsay Biscaia: How much of a driver is the Iran war when it comes to gold prices, or the mining sector as a whole?
Shree Kargutkar: I would say, in the near term, it certainly drives quite a bit of volatility as far as gold and silver prices are concerned. The longer-term picture for gold is still quite bullish, and it has been for many years now. If investors are okay with looking past some of the existing volatility, they'll be rewarded quite nicely over the long term.
Lindsay Biscaia: I do want to talk more about the long term in a moment. Just looking short term, gold fell today even as oil prices spiked. We're seeing many mining stocks lag on the TSX today. Do you think gold is losing out to the U.S. dollar as a safe haven, even just in the short term?
Shree Kargutkar: Certainly not. If you look at how the price of gold reacted starting with the Iran war, it actually rallied. Subsequently, we saw some volatility in gold, but year to date, it's still robustly higher. As of right now, I'm just looking at my screen, and it's up about 11.5% on the year. I don't really see any volatility in the U.S. dollar, or just the prevailing uncertainty impacting gold.
Lindsay Biscaia: What are you observing in the precious metals market from a supply-demand standpoint at the moment?
Shree Kargutkar: That's an interesting topic to discuss. We have noticed that despite the stellar appreciation in the price of gold, starting at the end of 2015 when it bottomed out around $1,000, it's currently around the $4,800 range, we haven't really seen a robust supply response from the mining industry. We've hovered around $3,700-$3,800 per ton annually for mining output. We have not seen a supply response in gold.
Lindsay Biscaia: What do you think the reason is for that?
Shree Kargutkar: The reasons are plentiful. The number one thing is that we have not really made any impactful discoveries that have been brought online over the past couple of years. Many gold mines often have much lower life expectancies than, say, copper mines. Gold mines usually start production after a 10- to 15-year period. The industry constantly has to replenish those mines with new ones, build new mines from scratch, or acquire new mines from other operators.
Gold is rare. The grades have been declining for many decades now. The amount of work and expenditures required to mine every ounce of gold is not going down. Obviously, finding new gold is quite difficult. There's a reason why gold is a rare metal.
Lindsay Biscaia: It's interesting. Could we be looking at even more of a shortage in the future, do you think, if demand is still high but there are still issues finding new gold output?
Shree Kargutkar: I wouldn't quite bet on gold output declining, for one simple reason, in that the price of gold has appreciated enough. We'll probably see some of the mines have their serviceable mine life extended a little bit. We're also starting to see some new mines come online. For instance, up in Northern Ontario, the Greenstone Mine just came on stream. Out in Newfoundland, we also had the Valentine Mine come on stream as well. There have been incremental additions, so I wouldn't really think the overall supply of gold, per se, will decline anytime soon.
Lindsay Biscaia: We've also been seeing some dealmaking picking up in the mining sector as well. The latest today is Agnico Eagle's deal to consolidate properties in Finland. What's behind the merger-and-acquisition (M&A) push there, do you think?
Shree Kargutkar: We have noticed, at Sprott, that there has been a clear discrepancy between how the market has been valuing existing producers like Agnico Eagle, for instance, and how existing developers, those that have a potential mine, but no existing output right now, are being valued. Developers are being valued much lower by the market than existing producers. Agnico doing this fairly substantial acquisition is a clear sign that producers are now recognizing arbitrage.
Lindsay Biscaia: Let's talk a little bit more about long term. You said, off the top, that you're seeing significant opportunities in mining equities. What would you look for in stocks that you would like to invest in, in this sector?
Shree Kargutkar: Most professional managers are always looking for companies with strong management teams, favorable jurisdictions and strong grades. When you typically get a combination of all three, that's your unicorn. Oftentimes, it's quite difficult to find all three in a single company. In many instances, if you're able to get a good enough jurisdiction or a good enough grade, but always with good management teams backing them, you can typically have some pretty substantial wins doing that.
Investment Risks and Important Disclosure
Relative to other sectors, precious metals and natural resources investments have higher headline risk and are more sensitive to changes in economic data, political or regulatory events, and underlying commodity price fluctuations. Risks related to extraction, storage and liquidity should also be considered.
Gold and precious metals are referred to with terms of art like "store of value," "safe haven" and "safe asset." 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.
Past performance is no guarantee of future results. You cannot invest directly in an index. Investments, commentary and opinions are unique and may not be reflective of any other Sprott entity or affiliate. Forward-looking language should not be construed as predictive. While third-party sources are believed to be reliable, Sprott makes no guarantee as to their accuracy or timeliness. This information does not constitute an offer or solicitation and may not be relied upon or considered to be the rendering of tax, legal, accounting or professional advice.
Green steel” is produced using environmentally sustainable methods, primarily by minimizing or eliminating carbon dioxide emissions, typically achieved by replacing coal-based blast furnaces with hydrogen-based direct reduction processes, using renewable energy sources in steel production, and recycling scrap steel in electric arc furnaces powered by clean electricity. Green steel may offer growing demand from industries seeking low-carbon materials, but it faces higher production costs, technology, scalability challenges and policy uncertainty compared to traditional steel.