Sentiment toward gold is generally positive at the moment, but Ian Ball, president and CEO of Abitibi Royalties (TSXV:RZZ), thinks the yellow metal may trade flat for the foreseeable future.
“I think the gold market right now reminds me very much of the 1980s,” he said at the recent Prospectors & Developers Association of Canada (PDAC) convention, citing the economic environment surrounding the yellow metal, including interest rates and the equities market.
“So, I think we’re going to trade in a band,” he continued. “You know, I’ve generally felt for the past few years that gold was going to trade sideways.”
That doesn’t mean gold won’t have some price swings. According to Ball, it could see both ups and downs.
“What you often have is the gold price will tick up and everyone says we’re in a bull market, and then it’ll go down and everyone says we’re in a bear market,” he said. “I don’t think we’re in either; I think we’re just going to be rangebound, probably for the next several years.”
Profitability is key in this type of gold price environment, said Ball, noting that Abitibi Royalties is pursuing profitability in a number of ways right now. Those include buying back shares, not issuing stock options and only acquiring new royalties through cash.
In general, he suggested that investors should look to mining companies that treat shareholders fairly. “I think you want to gravitate towards those types of companies because they’re few and far between in the mining industry,” he said.
Watch the video above for more insight from Ball on the gold market. You can also click here to view our full PDAC 2019 interview playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
