VIDEO: Randy Smallwood: There’s Only One Thing Holding Precious Metals Back

Gold and silver prices are on the rise, with gold nearing US$1,500 per ounce and silver comfortably above US$16 per ounce. But are those levels sustainable? 

According to Randy Smallwood, president and CEO of Wheaton Precious Metals (TSX:WPM,NYSE:WPM), the answer is yes. “I think it is, I think we’re only seeing the start of a movement,” he said on the sidelines of the Sprott Natural Resource Symposium.

“We’re setting record precious metal prices in so many currencies — or gold specifically in so many currencies around the world — it’s just the US dollar that’s so strong right now. And I just don’t see that US dollar strength continuing. So I think it bodes very well for precious metals for a long time.”

When asked whether silver is likely to outperform gold, Smallwood pointed to the white metal’s historical price movement, saying that there is a reason silver is known for moving more drastically than gold.

“Silver is the high beta play on precious metals. One of the reasons that silver moves like that is because so much of it is produced as a by-product from lead–zinc mines and copper mines,” he said.

“Those mines don’t change their production, so that just results in a very delayed response on the supply side … so silver always lags gold, but then it outperforms, and it has done that for the last 50, 60 years. It’s going to continue to do that,” he said. “Silver is a good place to play.”

Wheaton Precious Metals is a streaming company that currently has agreements in place for 19 operating mines and nine development-stage projects. Most are related to precious metals.

The business model is becoming increasingly popular, and Smallwood also shed light on what makes his company different from its competitors.

“The business model is a very good business model, but only if you have good foundation assets to build into it,” he explained, noting that a common mistake is for companies to invest in the wrong assets. “It’s a matter of how high quality are the assets themselves, and that’s where we differentiate ourselves.”

Watch the interview above for more insight from Smallwood on precious metals and the streaming model. Our full playlist for the Sprott event can be found 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.