Precious metals “stay the course” despite a difficult year


The latest article by Sprott CEO Peter Grosskopf highlights the resilience of precious metals in the midst of a tough year and highlights the fundamentals that support a strong 2022 in space.

As for 2022, Grosskopf expects the same to be true for some time. The Fed’s debt reduction plans could push rates up, and negative real rates continue to stimulate massive flows to equity and risk markets. He predicts persistent inflation, attributing it to the flood of global monetary stimulus and tight labor markets where workers wait for higher wages to keep up with the rising cost of living.

Discussing how the Fed plans to approach this, Grosskopf says: “It seems to us that a ‘fake cone’ is the real game plan. To justify this claim, we highlight a) the 10-year Congressional Budget Office, which continues to rely on low negative nominal and real interest rates, and b) the Fed’s continued willingness to provide debt relief facilities. massive pensions in the event of market fluctuations (no different than printing money to buy government debt or mortgage). It appears that the game plan of the Fed and the US Treasury Department, which is now a mathematical imperative, is to continue the financial crackdown on savers, outright. “

How do precious metals fit in

The risk of rising and falling rates held back gold and silver, despite otherwise ideal circumstances for precious metals. Gold fundamentals continue to strengthen as money supply and debt increase. “Sentiment indicators and technical data are slowly arguing for a resurgence of the long-term rally in gold, as the 100-year Dow / Gold ratio shows near historic highs (Figure 5) and with the potential for a strong reversal of the mean. . “

Gold stocks, on the other hand, are trading at an unusually low valuation against the S&P 500, indicating a potential correction on the horizon.

According to Grosskopf, Sprott plans to “focus on specialty minerals, which encompass many targets that could benefit from new products designed to provide quality and liquid investment options to a wider range of investors.”

Investors can gain exposure to gold through the Sprott Physical Gold Trust (PHYS). PHYS is fully allocated to gold which is stored securely, easy to buy or sell, and tradable. the Sprott Physical Silver Trust (PSLV) does the same for the money. Meanwhile, exposure to gold stocks can be obtained through the Sprott Gold Miners ETF (SGDM) and the Sprott Junior Gold Miners FNB (SGDJ).

For more news, information and strategies, visit the website Investment channel for gold and silver.


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