“It is very easy to conceive that there will be not many sellers of gold and there will be many new buyers,” said Kaiser.
With gold seemingly secure above US$1,900 per ounce and US$2,000 in sight, what’s the potential for the yellow metal for the rest of 2020?
John Kaiser of Kaiser Research believes, as he has for some time, that gold is due for a step change.
“I’ve been of the view that gold is set for a repricing into the US$2,000 to US$3,000 range — and this was last year, well before COVID-19 hit,” said Kaiser.
“The COVID-19 pandemic has created enormous global stresses which are accelerating the need for gold to go into the US$2,000, US$3,000 range. I wasn’t really expecting it to break through until 2021, but I think we’re on the threshold. It seems to be paused right now, sort of waiting … but I think once it does (break through) then it’ll move around back and forth between US$2,000, US$3,000.”
Kaiser spoke extensively about the factors behind gold’s momentum, with uncertainty being key.
“We’re entering an interregnum of extreme uncertainty. Later on (there will be) panic about inflation due to printing all this money and doing fiscal stimulus, but right now it’s a rush to hedge against this extreme uncertainty … it is very easy to conceive that there will be not many sellers of gold and there will be many new buyers,” he explained.
When asked about how gold’s price increase has impacted exploration companies, Kaiser said that while there’s been a muted reaction so far, that is going to change.
“(In terms of the juniors) we have … Bay Street saying, ‘Okay, even though gold’s going up, we really don’t want your destiny to be a function of gold, so we’re kind of going to ignore that … we’ll give you the money to drill deeper to prove your theory, and if you start showing that it’s there, we know you’ll need more money. There is more to come,'” he said.
Notably, said Kaiser, this influx of money is expanding laterally and not just coming to “power play” companies. “That’s a really really healthy sign that this market bull market for the juniors has legs.”
Watch the video above for more from Kaiser on the gold market and junior miners.
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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.