Tucker, who called gold’s rise to US$1,500 well before it happened, also discusses why he thinks the metal will pass its old high this year.
EB Tucker called gold’s move to US$1,500 per ounce last year well before it happened, and at the Vancouver Resource Investment Conference he shared his latest prediction for the yellow metal.
“What’s going to happen this year is gold will take out its old high,” said Tucker, who is a director at Metalla Royalty & Streaming (TSXV:MTA,NYSEAMERICAN:MTA), on the sidelines of the event.
In his opinion, it’s a matter of numbers, and the math is easy.
“The world has about 6.1 billion ounces of gold, and if you look at the amount of debt that’s outstanding, it’s only about 3.8 percent of the value of the debt. To give you some perspective, you’ve got US$250 trillion worth of debt, and US$9.5 trillion worth of gold — it’s very out of balance.
“This could easily be 5 percent, which would give gold a US$2,050 value … and we think there’s an adjustment that’s due. Because as you know, look at any bank — sometimes people don’t pay (their) loan back, (the bank has) to go out and repossess the house or do something — this happens. That’s going to happen in the world,” Tucker explained.
When asked whether factors like the US-China trade war and US-Iran tensions may play a role in moving gold this year, Tucker said issues like that are less important than underlying themes like debt.
“None of this stuff matters with gold. Gold is strictly a monetary story, it’s revaluing itself against debts … it’s not about an agreement or one little thing — it’s not about one tiny thing, it’s about a broader trend,” he said. “People that make serious money are able to focus on those broader trends and not be distracted by the day-to-day noise.”
For investors looking to enter the market right now, Tucker suggested putting money into physical metal, but said royalty and streaming stocks like Metalla are the place to be.
“It’s the highest profit per employee business — legal business — that I’m familiar with in the whole world,” he said. “More profitable than Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) — any of these companies that make the news — the royalty business just trounces those other companies.”
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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