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Eric Sprott, the co-founder of Sprott Money and a major player in the precious metals space, shared his thoughts on the current dynamics in the gold and silver markets. Known for his bullish stance on precious metals, Sprott didn’t hold back on what he sees as the potential ahead—while also voicing some frustrations.
Gold Hits Record, Silver Lags Behind
First off, Sprott noted that gold recently touched an all-time high of $2,500 per ounce, signaling strength in the market. But silver hasn’t quite kept up. Despite a significant 20% supply shortage, silver’s performance has been underwhelming, to say the least. You could say silver’s been the underdog here, but Sprott thinks the tides are turning.
He predicts that by the end of the year, we could see gold pushing toward $3,000 per ounce, with silver hitting $50 per ounce. That’s a bold forecast, but if there’s one thing we know, Sprott is no stranger to bold predictions.
Undervalued Stocks: Where to Look
Sprott isn’t just watching the metals themselves; he’s got his eye on some stocks too. Among his top picks are Discovery Silver (TSX: DSV), Free Gold Ventures (TSX: FVL), Jaguar Mining (TSX: JAG), and New Found Gold (TSXV: NFG).
Now, it’s not all sunshine and rainbows, as there are real concerns around companies such as Discovery Silver, particularly with potential restrictions on open-pit mining in Mexico. That could slow things down a bit. But for Sprott, the opportunity is still there.
The Silver Shortage: A Real Issue?
Sprott estimates the silver supply shortfall at around 250 million ounces. That’s no small gap. Sectors like electric vehicles and photovoltaics are gobbling up silver, and demand is set to spike even more with the introduction of new tech—like Samsung’s solid-state battery, which could need up to 500 million ounces annually. If that happens, Sprott thinks we’re looking at some serious upside in silver prices.
But here’s the question: why hasn’t silver already taken off? It’s a bit of a head-scratcher, especially when gold is hitting new highs. Sprott is frustrated too. He’s not the only one wondering why silver’s lagging while facing a clear supply-demand crunch.
Gold ETFs and a Shift Away from the Dollar
On the other side of the metals equation, Sprott highlighted the growing interest in gold ETFs. According to him, nations like China and Poland are scooping up gold—and silver—as part of a larger move away from the U.S. dollar as the world’s reserve currency. It’s a quiet but powerful shift.
Sprott even touched on the role of computers and AI in driving up demand for gold, perhaps even more so than human investors realize. It’s a complex landscape, but Sprott thinks we’re just seeing the tip of the iceberg.
Specific Stock Opportunities: A Deeper Dive
Sprott got into the weeds on a few specific stocks. For Free Gold Ventures, he’s especially bullish. The company holds a NI 43-101 gold resource of 20 million ounces in Alaska, yet it’s trading with a market cap under $300 million or $15 per ounce. According to Sprott, that’s a bargain—and he sees room for growth, both in terms of resources and stock valuation.
Jaguar Mining also caught his attention, thanks to some recent high-grade discoveries at an existing mine. If all goes according to plan, Jaguar could see its gold production double in the near term.
However, New Found Gold — another pick — has been a bit disappointing. The stock has struggled, in part due to lower-than-expected grades and a lack of continuity in the resource, and potentially, short sellers. Still, Sprott is hopeful, saying he believes the company will eventually find the feeder zones as it drills deeper.
The Bigger Picture: Long-Term Outlook for Gold and Silver
When asked about the broader outlook for precious metals, Sprott was, as usual, optimistic. He pointed out the long-term historical performance of gold and silver, framing them as essential hedges against economic instability. In today’s world, with inflation and government actions casting a shadow over markets, he’s adamant that holding gold and silver is more important than ever.
He’s not just talking about physical metals either. Sprott sees huge potential in the stock market, particularly with gold and silver companies that are still trading at a discount. If his price predictions for gold ($3,000) and silver ($50) come true, he believes some of these stocks could easily triple or quadruple in value.
Final Thoughts: Staying Ahead of the Curve
As always, Sprott emphasized the importance of staying informed. For investors in the gold and silver markets, the landscape can shift quickly—whether it’s due to new technologies, supply shortages, or global economic shifts. And while some of Sprott’s predictions may seem bold, he’s got a track record of spotting opportunities before the rest of the market catches on.
So, what does this all mean for investors? If Sprott’s right, we could be in for a wild ride in the months ahead. Whether you’re bullish or bearish on gold and silver, one thing’s clear: these markets are heating up, and the stakes have never been higher.