Gold is having its best month in over a year, says Sprott Asset Management CEO Peter Grosskopf, in an interview with Asset TV’s Jenna Dagenhart.
“The long-term physical accumulation phase is just getting started for gold,” he said. “We may have an extended period where gold is likely to enjoy advantages over other assets. We, at Sprott, are looking at a very busy time with many investors interested in gold, pointing to a very positive five to ten-year story.
Gold’s price hit $2,075/oz in July 2020, and then softened until recently. Grosskopf says Sprott had anticipated this, however.
“The softening that you’re referring to was somewhat expected, as people focused on the economic and market recovery, which experienced very strong conditions; and other financial markets, such as the bond market, which saw a very large move in yields to the upside. Understandably, investors were less than thrilled with gold during that time,” he said.
Recent concerns over the effectiveness of Fed tapering have investors thinking long-term again, which has benefited gold, he added.
Grosskopf also sees exciting possibilities for silver. “Smaller investors are buying physical silver and chasing that market right now. We also see demand coming from all quadrants and it could easily overwhelm the market.”
He added that “the price action in silver could really be more explosive than gold.”
For investors looking to directly access physical exposure to the yellow metal, the Sprott Physical Gold Trust PHYS holds gold bullion. The Sprott Physical Silver Trust (PSLV ) holds LGD silver bars.
Mining Primed for Long-Term Success
Mining companies have also been hard at work laying the foundations for future success. Grosskopf points out that the industry has been undergoing vast transformation to make the work more environmentally friendly and safer.
“Gold companies haven’t been cheaper than this in a long time versus the gold price,” said Grosskopf.
He sees a protected downside with a high upside, especially if gold’s price keeps climbing.
Sprott offers two actively managed precious metals mining ETFs: the Sprott Gold Miners ETF (SGDM ), which tracks gold majors, and the Sprott Junior Gold Miners ETF (SGDJ ), which tracks junior gold miners.
For more news, information, and strategy, visit the Gold & Silver Investing Channel.