"I am of the belief that we are in the early innings of a gold and silver bull market," said Shree Kargutkar of Sprott Asset Management.
Shree Kargutkar: Gold and Silver Price Drivers, Major Opportunity in Stocksyoutu.be
It's tough to predict where precious metals prices may go in 2022, but their key drivers can provide clues.
Speaking to the Investing News Network, Shree Kargutkar, managing director and portfolio manager at Sprott Asset Management, said he thinks the single biggest factor for the gold price this year will be investor demand.
He noted that while investor demand reached an all-time high in 2020, it flagged in 2021 despite factors like negative real rates, higher inflation and increasing deficits all around the world.
Meanwhile, physical gold demand from top buyers China and India was weak in 2020 and into the first half of 2021, but experienced a strong recovery in the second part of last year.
Kargutkar noted that gold should experience positive price action if both types of demand do well in 2022. "If you get both the physical buyers buying and the investors coming back into the space, this should create a little bit of magic as far as gold prices are concerned," he explained during the conversation.
Looking over to silver, which has both industrial and investment uses, Kargutkar said that while demand for the white metal has always skewed to the industrial side, investor demand is crucial for prices.
"What I think will be the key determinant in 2022 will be the focus that institutional investors, as well as large retail investors, start to pay towards silver exchange-traded funds (ETFs), and if they're actually allocating money into either the ETFs or the bullion funds or in the physical metal outright," he explained. "I think that will be the single most important driver as far as the silver price is concerned."
Kargutkar also spoke about the "generational opportunity" he sees in precious metals equities right now, saying he favors mid-tier and smaller producers, as well as high-impact exploration companies.
Watch the interview above for more of his thoughts on precious metals.
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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.
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