Rick Rule: US Dollar is the Most Important Impact on Gold

Rick Rule of Sprott US Holdings kept busy at the recent Sprott-Stansberry Vancouver Natural Resource Symposium, giving multiple talks over the course of the four-day conference and holding down the fort at his booth during downtime. Amid that activity, he was able to speak to the Investing News Network about the gold price, stocks Sprott likes and demographic issues in the resource space.
Rule has said in the past that the gold price could rise if the anticipated US interest rate rise fails, or if Federal Reserve Chair Janet Yellen isn’t able to follow through with a second interest rate increase. However, those comments raise the question of what a failed interest rate rise would look like — explaining, Rule laid out a couple of scenarios that could lead to such a failure, reiterating, “I think that would be extremely significant for gold.”
Speaking more specifically about future prospects for the gold price, Rule said that investors shouldn’t be “particularly hopeful about the gold price this year.” He said, “my own view is that the gold price trades contra to confidence in the US dollar.” Unfortunately for investors, the US dollar has been “very strong, perhaps as a consequence of weakness in other instruments.”
For that reason, Rule believes that “until something happens to shake a little bit [of] faith in the US dollar … the gold price will be in the doldrums.” And while non-US factors are important for gold investors to watch, he believes that “the most important impact on gold is the US dollar.”
On a different note, Rule talked a little about the companies at the conference, all of which are owned by Sprott and which Sprott decided were important for attendees to have on their radar. He said that the ones that have put out the best news lately include Ivanhoe Mines (TSX:IVN), Mariana Resources (LSE:MARL) and Reservoir Minerals (TSXV:RMC), which recently released “one of the 10 best drill holes [Rule] has ever seen in [his] career.”
Watch the video above for more of Rule’s thoughts on the gold price and to learn why he thinks the exploration industry is going to face age and gender gaps in the not-too-far-off future.
 

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.
Related reading: 
Rick Rule: TSXV Not All Carnage and Wreckage
Rick Rule: ‘Gold Doesn’t Need to Win the War Against the US Dollar’
Rick Rule: ‘Get Ready — It’s Going to be a Good Few Years’