VIDEO — Randy Smallwood: We Don’t See an End to Palladium’s Outperformance

- March 10th, 2020

Smallwood is optimistic about precious metals moving forward, as well as the performance of Wheaton Precious Metals.

Speaking to the Investing News Network (INN) at this year’s Prospectors & Developers Association of Canada (PDAC) convention, Randy Smallwood pointed out that the coronavirus is forcing miners to think about contingency plans and policies, which ultimately is a good thing.

Smallwood, who is president and CEO of Wheaton Precious Metals (TSX:WPM,NYSE:WPM), said, “(Companies should be) making sure that (they’ve) got the proper procedures and policies in place, and that (they) are sustainable through issues like this.”

Speaking prior to the US Federal Reserve’s emergency rate cut last week, he said he was interested to see how potential moves like that could impact precious metals.

 

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“I’m most intrigued about the concept of central governments trying to stimulate growth to offset some of the impacts of things like the coronavirus, and that of course bodes very well for precious metals in the long term,” he explained.

Wheaton Precious Metals is a streaming company, meaning it pays companies an upfront fee to acquire all or part of their production, primarily of precious metals. This type of company gives investors less risky exposure to metals output.

The company was able to exceed its 2019 guidance of 690,000 gold equivalent ounces ounces, producing 706,900 gold equivalent ounces. Wheaton expects to average over 750,000 gold equivalent ounces over the next five years, while its silver output will remain stable.

Smallwood is particularly optimistic about palladium, which has been on an incredible price run over the last year and currently is priced just over US$2,400 per ounce.

“With the shift away from diesel engines, palladium is outperforming and outperforming very strongly. And we don’t see an end to it, there’s nothing that’s going to come in,” he said.

“These are real shortages that are impacting the automobile industry in terms of being able to find enough palladium to satisfy the needs — the increased needs — for the catalysts on the gasoline side.”

Smallwood added, “We just don’t see any change in supply. There’s just a definite deficit in terms of commodity out there, and there’s nothing that’s going to change in the next while.”

To hear more from Smallwood regarding the difficulties substituting platinum for palladium in the catalyst industry and what else Wheaton Precious Metals has planned for the year, watch the video above. You can also click here for our full PDAC playlist.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Georgia Williams, 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.

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