Top Stories This Week: Experts Unfazed by Lower Gold Price, Recapping PDAC
Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.
Our coverage this week at INN centered on the Prospectors & Developers Association of Canada convention, which ran entirely online this year from March 8 to 11.
Better known as PDAC, the event is normally held in Toronto, and is always a major occasion for those in the mining industry — this year’s entirely virtual gathering was no exception.
To mark the occasion, I spoke with a number of favorites in the resource space: Rick Rule, EB Tucker, Frank Holmes and Jeffrey Christian. The gold price was unsurprisingly a key topic of conversation, and the experts shared their views on its decline so far in 2021, as well as what could be next.
To recap, after rising as high as US1,950 per ounce in January, gold has trended down, even falling below the US$1,700 per ounce mark. It was sitting at about US$1,725 on Friday (March 12) afternoon.
Despite that price activity, the main takeaway from the industry insiders I spoke with was that the future still looks bright for the yellow metal.
Rick, who recently announced his partial retirement from Sprott (TSX:SII,NYSE:SII), reiterated comments he made toward the end of 2020, saying gold is in “a cyclical decline in a secular bull market.” He added that cyclical declines are not uncommon during bull markets — in fact, they can be frequent and fairly deep. In his opinion, those who can’t tolerate that volatility may want to exit the sector.
“I would suggest that investors who can’t stand that volatility — that they simply exit the sector. It’s a factor — it’s part of participating in the sector” — Rick Rule, Sprott
EB, who is a director at Metalla Royalty & Streaming (TSXV:MTA,NYSEAMERICAN,MTA) and Nova Royalty (TSXV:NOVR,OTC Pink:NVARF), is well known for his gold and silver price predictions, and he said he still expects US$2,500 gold and US$50 per ounce silver in 2021. But he also has an interest in copper and nickel, which have both experienced price momentum this year.
Although both metals have traditional industrial applications, he sees demand from the electric vehicle sector and other “green” end users becoming more common in the years to come.
By the time the poll closed, silver was the winner with nearly 50 percent of the vote — but it’s worth noting that a large number of respondents wrote in uranium.
Bitcoin’s move into the mainstream has increased the investment options available to investors — 2021 has brought the launch of the first bitcoin ETFs, along with additions to the bitcoin trust space.
But is bitcoin really in competition with gold? The consensus seems to be that the two assets can coexist in a portfolio — although of course it’s up to each individual investor to decide for themself.
“Investors may consider bitcoin for capital appreciation, as an alternative to traditional investments, as a complement to gold exposure and/or (to position) as a potential hedge against inflation” — Raj Lala, Evolve ETFs
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Nova Royalty is a client of the Investing News Network. This article is not paid-for content.
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.