The easiest money will continue to be made in precious metals, says Rick Rule. But patient speculators may want to consider uranium.
“I think the easiest money in our sector will continue to be made in precious metals,” he said at the Vancouver Resource Investment Conference (VRIC). “I think that if we keep going in the gold market, if the gold market continues to strengthen, we’ll see follow through in the silver market.”
The gold price broke through US$1,600 per ounce earlier this year on the back of heightened tensions between the US and Iran, but has since sunk back down to around US$1,550 — a level that Rule thinks is sustainable, despite the fact that both gold and the US dollar are trending higher.
“I think we saw this before … (in) 2001, we had a period where the US dollar was strong and gold was strong. And again the US dollar was strong not because of any intrinsic strength in the US economy … but rather as a consequence of weakness in the Euro bloc and the yuan,” he explained.
“In 2002, the US dollar rolled over and gold went on a run from US$260 to US$1,500. And I think past is prologue — I really think that we’re in a circumstance where the US dollar is strong not because of any huge strength in the US economy, but rather because of relative strength compared to other economies.”
Rule also spoke about uranium, saying that investors who are concerned about when the market will turn — not if it will — should stay away until prices start to move. Those who are willing to wait for a turnaround, however, may want to take their chances now.
“I would encourage speculators who can afford the risk and are patient to participate, because the universe of good uranium issuers is very small. And when the market returns, which it will, the upside could be absolutely dramatic. But if you’re impatient it’s the wrong game,” he said.
Watch the video above for more from Rule, including how he sees the upcoming US election impacting gold. You can also click here to see our full VRIC playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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