It’s been a good year for gold, which is up about 24 percent despite a recent correction.
But what’s been driving the yellow metal and what factors will be important to watch moving forward? Speaking to the Investing News Network, Maria Smirnova, senior portfolio manager at Sprott Asset Management, shared three key gold catalysts to keep an eye on.
“I would say watch fiscal policy, watch monetary policy. What the central banks around the world will do going forward is very important. This will affect … real yields — interest rates adjusted for inflation — and global liquidity,” she explained. “If we’re seeing that banks and governments are injecting liquidity, that is positive for gold. Those are two very important factors.”
The third catalyst, according to Smirnova, is geopolitical tensions or risks. “We’ve seen in the past — maybe not this year — but we’ve talked in the last couple of years about what’s going on in the world geopolitically to contribute fuel to that fire and drive the gold price higher as well.”
Smirnova also touched on silver, explaining that Sprott, which is a sub-advisor to Ninepoint Partners, is more bullish right now on silver than on gold, and has been for awhile.
Why? Although it’s more volatile, silver historically outperforms gold in a bull market — just as it’s doing right now. In addition, silver’s industrial side may boost its price as the world recovers after COVID-19.
In terms of how to get exposure to these precious metals, Smirnova emphasized that each investor should consult with a financial advisor to find out what’s best for them. That said, she did note that exchange-traded funds are a strong option, particularly when buying bullion.
She also noted that stock products can be a good place to look, noting that Sprott’s focus is on small- to mid-cap companies because they have more opportunities to create value. “(Exploration) is the lifeblood of the industry, and that is what we focus on. We’re focusing on companies and management teams that can find the future of the industry,” Smirnova said.
For more from Smirnova on gold and silver, watch the interview above.
Don’t forget to follow us @INN_Resource for real-time updates!
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.
