In this exclusive interview, Eric Sprott answers questions about the gold and silver market in which he suggests that gold could double in a year and, in the case of silver, could go up even more than that. As for gold and silver equities, he believes gains could be gargantuan because the equities always double or triple the performance of physical gold. Here’s his reasoning.
The following are edited excerpts from an interview* by Nathan McDonald of Sprott Money News (SMN) on Ask the Expert with Eric Sprott. (Hat Tip to Arnold B.)
[The following article is presented by Lorimer Wilson, editor of www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
SMN: Gold and silver have shown some strong strength recently, just in the last week. Do you believe that the worst is behind us? Do you believe gold and silver have begun the next leg up in this bull market?
Eric: Yes. I think we saw the bottom on June 28th. My way of defining a bull market in a commodity…[is that if] a product can go up 20% in a reasonably short time, from a declining trend to up 20%, then we’re in a new bull market and silver has…[done just that recently].
We’ve had the silver stocks go up to 37% so they’re in a bull market too. Both silver and the silver stocks have broken the 50-day moving averages, and…gold’s gone through its 50-day moving average so it has all the signs of being in a new bull market. If I believe my own analysis that there’s a shortage of physical gold, and there’s a huge fight going on, they lost the fight. The fact is that demand surged for gold and silver, when the price got knocked down.
I personally believe we are going to see a very, very dramatic increase in the price of gold and silver. When I mean dramatic, I mean they could double in a year, and in the case of silver, it probably could go up more than that.
The spill-off effect to the equities could be gargantuan, because the equities always double or triple the performance of gold so I think we have the set up for it.
We have all the indications of tightness. We have the technical indicators starting to come together here, and I think it looks very, very exciting for precious metals owners and investors.
SMN: I agree. The scenario that’s setting up looks like it’s going to be a fantastic opportunity for anybody that’s able to weather the storm or hold strong. In conclusion, Eric, can you tell our listeners about the many ways that they can invest with Sprott Asset Management?
1. We have lots of precious metal mutual fund products:
- a precious metal mutual fund
- a silver equities class mutual fund
- a silver bullion fund that owns physical gold here in Canada
- a gold bullion fund in Canada.
2. We have three separate trusts:
- the gold trust that trades on Toronto and New York
- the silver trust that trades on Toronto and New York
- the platinum and palladium trust that trades here.
3. We also have the Canadian equity fund, which, for the most part, is 50%-60% involved in precious metals so they should be stellar performers with what we envision happening going forward.
4. Finally, we have hedge funds that are very significantly invested in precious metals, and, of course, have some shorts on the other side because of my big concern that the stock market might come down here, because things aren’t normal, and things that are abnormal correct themselves.
People can go to our website at Sprott.com for more information on gold and silver. We have a couple of publications, Markets At A Glance and Sprott’s Thoughts that you can sign up to. It doesn’t cost anything. There are two or three issues a week giving comments on various things, economic and precious metals. Go to the website and check it out. In addition, if you’re in need of gold and silver coins or bars, you can always go to Sprott Money. We have quite an inventory, and we’re happy to provide that service.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.sprottmoney.com/news/ask-the-expert-eric-sprott-august-2013 (© 2013 Buy Gold and Silver Online | Precious Metals Dealer – Sprottmoney.com. All Rights Reserved; Eric Sprott is Chairman of Sprott Money Ltd. Additionally, he is CEO, CIO and Senior Portfolio Manager of Sprott Asset Management LP and Chairman of Sprott Inc.)
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