VIDEO - Rick Rule: Positioning for the Good, the Bad and the Ugly in Mining

COVID-19 has left many investors wondering what their path forward should be, and the question remains even as countries around the world begin to ease lockdown restrictions. 

Speaking in a recent video interview, mining veteran Rick Rule shared some advice based on what he’s doing at Sprott (TSX:SII,NYSE:SII) right now.

“Until we come out of the back side of this slowdown — and I have no idea where that will be — the non-precious metals commodities will continue to face challenges, and we’re investing accordingly,” he said.

“I think the message to investors and speculators … is precious metals now, but get ready for — two years from now, three years from now, four years from now — a stupendous rally in industrial commodities,” Rule elaborated during the conversation.

“For those people who are really contrarian and able to choose, in movie parlance, between the good and the bad and the ugly — you might begin to position yourself in the better names in anticipation.”

Rule went into more detail about the case for gold and other precious metals, saying that there are three main reasons why they are in a good place right now: quantitative easing, artificially low interest rates and government debt and deficits. In his opinion, those factors all play to gold’s favor.

“If the combination of quantitative easing, artificially low interest rates, debt and deficits did in fact put some wind in gold’s sails, which I believe they will, the base from which we expand is very low,” said Rule.

Explaining further, he noted that if gold ownership returned to the three decade mean, which in America is only about 2 percent of the savings and investment matrix, demand for precious metals and assets related to precious metals would “between triple and quadruple.”

Watch the video above for more from Rule on the economic and fiscal fallout of COVID-19, how the mining sector has reacted to the pandemic and what other trends are affecting the resource space.

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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.