"There will be a time for gold and silver ... but it's not now, and it hasn't been for the past year," said Nick Hodge of Daily Profit Cycle.
Nick Hodge: Uranium Backdrop Never More Bullish; Gold, Silver on Sidelinesyoutu.be
Gold and silver will eventually have their day in the sun, but Nick Hodge, editor of Daily Profit Cycle, doesn't think that's in the cards until after the current economic environment improves.
"There will be a time for gold and silver … but it's not now, and it hasn't been for the past year because of how strong the dollar has been, and because of how strong bond yields have been," he told the Investing News Network.
Hodge noted that rather than precious metals, the real hedge to inflation in the current cycle has been the US dollar. However, that's not what many market participants want to hear, particularly those on social media forums like Reddit.
"(People on Reddit) often tell you that the death of the dollar is here, and the dollar isn't worth anything — but you know, the dollar is the strongest it's been in 20 years, and it's proven to be one of the most safe havens to be in this current climate."
Looking over to uranium, Hodge noted that fundamentals have never been better, and there are opportunities for those who take the time to be selective. One company he's been looking at is sector major Cameco (TSX:CCO,NYSE:CCJ), which recently teamed up with Brookfield Renewable Partners (TSX:BEP.UN,NYSE:BEP) to acquire Westinghouse Electric Company.
"Cameco would be one I would look to buy. We were in it in the monthly letter awhile ago, and then we sold in uranium's last run. And it got quite cheap because they had to sell a lot of shares to finance (the Westinghouse) deal … there's opportunity in these broad selloffs — babies get thrown out with the bathwater," he said.
Speaking about the future of M&A activity in the uranium sector, Hodge said it's possible that the partnership between Cameco and Brookfield could herald new deals with larger energy companies, or even utilities.
"What we're waiting on now is for the price of uranium to go back up. You're going to see a time in the next two to three years, I'm pretty sure, of +US$100 (per pound) uranium, if not +US$150 uranium, just like you did in 2007," he said.
Exactly when is hard to pinpoint, but Hodge believes once inflation subsides and the economy starts growing again, commodities — including uranium — will take off.
Watch the interview above for more from Hodge on gold, silver and uranium. You can also click here to read our recap of the New Orleans Investment Conference and here for our full event playlist on YouTube.
Don’t forget to follow us @INN_Resource for real-time updates!
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.