Maria Smirnova of Sprott Asset Management also spoke about where investors may find opportunity among the mining stocks.
The gold price has lost some steam since its big rise in mid-2020, but according to Maria Smirnova of Sprott Asset Management, the metal’s fundamentals remain intact.
Speaking to the Investing News Network, Smirnova, who is a senior portfolio manager at the firm, said that the three drivers of gold she discussed in a previous early October interview are still important.
Those factors were fiscal policy, monetary policy and geopolitical tensions, and Smirnova explained that together they indicate strong support for gold and silver.
“If anything, the fiscal side of things has an improved outlook for gold and silver in the sense that if we have more proposals for trillions of dollars of stimulus, that only should be good for the metals.”
Meanwhile, on the monetary side, the US Federal Reserve and European Central Bank continue to reiterate their dovish stances. “They are in expansionary/easy monetary policy mode, and again that should be very positive for gold and silver,” Smirnova explained.
Geopolitical tensions are less of a catalyst at the moment as the world continues to recover from the COVID-19 pandemic, but Smirnova encouraged market watchers to keep an eye on trade tensions.
She also said that Sprott, which is a sub-advisor to Ninepoint Partners, continues to be more bullish on silver than on gold, and touched on three areas that appear promising for future demand growth in the silver sector: solar energy, vehicles and 5G networks.
In terms of mining companies to consider this year, Smirnova said that Sprott is interested in the small- to mid-caps, especially growing smaller producers.
“Why I think that there’s a lot of upside for those particular companies is that at current gold and silver prices, companies are actually making real money. We are seeing companies that have the potential to generate 20 percent free cash flow yield — anything north of 10 percent free cash flow yield is excellent.”
Watch the video above for more from Smirnova on gold, silver and investment possibilities in 2021.
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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.