Sprott CEO and veteran gold industry expert Peter Grosskopf thinks gold’s rally is only just beginning.
“Gold is an enormous market, mostly liquid. Concurrent with the next downdraft in equities we’ll see gold smashing through $1,800 an ounce and continuing on its way to more than $2,000 by the end of the year,” Grosskopf said on Yahoo Finance’s The First Trade.
Grosskopf is putting his money where his mouth speaks, as they would say.
Sprott (SII) — a manager of precious metal investments with $11 billion in assets under management founded in 1981 — listed on the New York Stock Exchange Monday. The listing reflects Sprott’s bullishness on the outlook for gold. That, and the publicity from the listing should help Sprott attract more assets under management.
“I am a believer in libertarian policies, so I’ve been worried about the central bank’s hand in the economy for a long time. I think gold is a natural hedge to that,” Grosskopf added. The view by Libertarians has long been the Federal Reserve’s easy money policies would spark rampant inflation that undermines the U.S. dollar, causing a flight into a hard currency such as gold.
While few would argue there is currently rampant inflation in the COVID-19 stricken U.S. economy, investors may be positioning for it in 2021 judging by gold’s strong upside move.
Gold prices have stormed ahead (despite the stock market’s surge from the March lows) to nearly eight-year highs at about $1,800 an ounce. The move has spread to gold focused equities.
Shares of gold miner Freeport McMoran have spiked 27% in the past month, per Yahoo Finance Premium data. Barrick Gold and Newmont Corporation are up 11.5% and 5%, respectively. The SPDR Gold Shares ETF has tacked on a more pedestrian 3% increase month-to-date, but is up 17% on the year.