Kitco NEWS Interviews

Over the next few weeks, gold is set to outperform Bitcoin, said Florian Grummes, managing director of Midas Touch Consulting. The question is how long this outperformance can last?

David Barse, CEO of XOUT Capital, and Peter Grandich, founder of Peter Grandich & Co. join Kitco’s David Lin to discuss the outlook on equities, gold, and Bitcoin.

The end of this current bull market cycle will be marked by “significant damage,” said Ted Oakley, founder and partner of Oxbow Advisors, who have currently allocated 35% of their investments into cash.Oakley told David Lin that one of main factors behind the stock market rally in the last 10 years has been quantitative easing from the Federal Reserve, so any tightening from the central bank will likely trigger a market correction.

Silver is a strategic metal, and with mounting industrial demand it’s only a matter of time before previous all-time highs are met, and then a new push to triple digits is on the way, said Keith Neumeyer, CEO of First Majestic Silver.“Silver is the only commodity that is not reaching its [historic] highs, and it has reached [those highs] on two separate occasions, back in 1980 and 2011. I think we’re going to see that high breached in the cycle, and when it does, it’s going to wake up the market. Once it breaks through the $50 level, I think that it’s going to get up to the $100 level pretty quickly,” Neumeyer told David Lin, anchor for Kitco News.

When the lumber to gold ratio spikes, it's usually a signal that risk on sentiment will remain strong, said Michael Gayed, portfolio manager at Toroso Investments. Gayed has been tracking the lumber to gold ratio as part of his Lead-Lag report, and his studies have found that peaks and troughs usually lead equity rallies and declines, respectively. However, given the spike in lumber prices, it's only a matter of time before prices mean revert downward, meaning a stock market correction could be on the horizon.

Wheaton Precious Metals affirmed that the company is primarily a precious metal business despite announcing first production from a cobalt stream from Voisey's Bay. CEO Randy Smallwood spoke to Kitco on Friday. The cobalt deal was first announced in 2018. The company's Q1 was Thursday. Wheaton's revenue was $324 million in the first quarter of 2021, representing a 27% increase from the first quarter of 2020 due primarily to an equivalent increase in the average realized gold price. The company affirmed year-end guidance.

Ethereum's use case extends beyond simply investing and speculation. Jason Lau, COO of OKCoin, discusses the second largest crypto's utility and evolution.

Bitcoin is digital and that's its fundamental weakness, said Royalty Gold CEO David Garofalo in a conversation with Kitco on Tuesday. Garofalo said gold is physical, which makes it more secure while cryptocurrencies will inevitably succumb to market forces. "It's inevitable that we'll see new entrants on the cryptocurrency side, and that really undermines the whole scarcity concept that Bitcoin is trying to espouse. It's just zeros and ones at the end of the day," said Garofalo.

The Metals Company has over $500 million pipeline to fund the company through to small-scale commercial production, said CEO Gerard Barron who spoke to Kitco on Thursday. The Metals Company was formerly named DeepGreen. A March financing valued the company at about $2.9 billion. Barron told Kitco he sees around $570 million total from the raise that will fund the company. The Metals Company plans to collects polymetallic nodules containing cobalt, nickel, manganese and copper from the ocean floor.

Peter Grandich, founder of Peter Grandich & Co., discusses what he believes are the asset classes that are critically overvalued right now. "We're in some very, very deep troubled times, perhaps the most troubled times for America, ever," Grandich told David Lin, anchor for Kitco News.

Residential real estate has continued to boom during the pandemic, with the Canadian market taking the lead in growth. Alex Kenjeev, President of O’Leary Ventures, discusses whether or not the housing market has reached bubble territory.

Size matters, and Sibanye-Stillwater (JSE:SSW) may find scale in its home country. Company CEO Neal Froneman recently spoke to Kitco News. The company is headquartered in South Africa. Froneman said a $20 billion market capitalization is more relevant and investable for the broader market. Sibanye is sitting at $12.5 billion. To build size, Froneman noted that South African miners are trading at a discount compared to their North American peers. Business Day reported that a tie up of the country's top miners—Gold Fields and AngloGold Ashanti along with Sibanye - would be in the national interest.

Steve Hanke, professor of applied economics at Johns Hopkins University, Hong Fang, CEO of OKCoing, and Saifedean Ammous, author of ‘The Bitcoin Standard’, continue the conversation in part 2 of this debate. The focus is on Bitcoin's role as a global currency, and the possibility of creating a currency board based on cryptocurrencies.

How can Bitcoin be valued, and what is its worth? In part 1 of this panel discussion, Steve Hanke, professor of applied economics at Johns Hopkins University, Hong Fang, CEO of OKCoing, and Saifedean Ammous, author of ‘The Bitcoin Standard’, debate Bitcoin’s utility, history, and its “fundamental value.”

The last time copper and base metals sustained a multi-year bull rally was in the early 2000s during a period of rapid Chinese industrialization. China is still the world's top consumer of copper and base metals, and the country is about to experience a boom similar to what they had in the early 2000s, only with the "electrification" movement, said Gianni Kovacevic, CEO of CopperBank.

Gold is down, at one point, 0.6% on Monday, but traders and investors alike need to understand that this really is not a big move, said Chris Vermeulen, chief market strategist at https://TheTechnicalTraders.com. “Today, we’re just this tiny little red bar, this average, usually we see a quarter of a percent, or half a percent move in gold, and today we’re down only half a percent,” Vermeulen said. Gold miners, which usually lead the bullion in price action, have another 10% or so of downside before prices rebound, he added.

Ray Dalio, co-chief investment officer of Bridgewater Associates, recently wrote that policy makers short on money will likely raise taxes and prevent capital flows into “other assets” like gold and Bitcoin. E.B. Tucker, director of Metalla Royalty and author of “Why Gold, Why Now” said that the government already has the tools to do this. “Everyone gets this idea that the [government] will raid your house and look for your gold. It’s not necessary. All you have to do is limit the ability to transact gold in the legal market, and then you assess an excise tax,” Tucker said.

More than the threat of inflation, the Federal Reserve is really concerned about unemployment and underemployment, said Bill Baruch, president of Blue Line Futures. "[The Fed] doesn't really expect inflation, that doesn't give them reason to move but they do want to see full employment," Baruch said. "The U3 rate is about 6%. It's the U6 rate that is 11% right now, and that's the underemployment, so people that have fallen out of the work force, and that's what worries the Fed and that's one of the reasons why they should remain dovish."

The Federal Reserve has announced that the Fed Funds rate will remain low until at least 2023. Both gold and the equity markets rallied in response to Fed Chair Jerome Powell's dovishness, but can the turnaround in prices last? Gary Wagner, editor of TheGoldForecast.com analyzes the next key price levels.

The 10-year yield rose to 14-month highs on Thursday at 1.75%, erasing the gains in gold price yesterday following the Federal Reserve's statements. Lobo Tiggre of The Independent Speculator, said that without yield curve control, the 10-year Treasury note could rise to as high as 2%, which would cause the markets to "break". Short-term, gold has more downside, he said.

Non-fungible tokens, or NFTs, are minting new millionaires overnight, and this brand new asset class is not only here to stay, but on the way to revolutionizing commerce as we know it, said Ian Rogers, chief experience officer of Ledger.

The silver squeeze movement is still ongoing, said Ivan Bayoukhi, founder of WallStreetSilver, whose number one goal is to wake up “billions of people to getting silver.”

Should sentiment for the precious metals return to a level more in line with the historical average, demand for gold will skyrocket, Rick Rule, director of Sprott in a panel discussion with Amir Adnani, chairman of GoldMining and CEO of UEC. Adnani added that investors in the resource sector need to take a long-term view for their time horizon.

Ed Egilinsky, head of alternative investments at Direxion, discusses the top innovators in the technology space, as well as how precious metals stacks up with other commodities in the current economic environment.

Aside from the emergence of electric vehicles, the demand for raw commodities from China is still a dominant driver for metals prices, said Colin Hamilton, commodity analyst at BMO Capital Markets.

Gold’s role as the primary inflation hedge has been replaced by other assets, as investors bet on raw commodities to outperform during a reflationary environment, said Phil Streible, chief market strategist of Blue Line Futures. “Typically, [gold and inflation expectation] do correlate together because gold has historically been a great asset class for inflation,” Streible said. “However, when all asset classes, and in specifically commodities, basically went to unprecedented lower levels, things like lumber, crude oil are going negative, everything from your grain markets, copper, everything got smashed one year ago today…the price of those commodities have really taken off on the upside.”

Agnico Eagle has continued to grow their portfolio through acquisitions. The company acquired TMAC Resources in early 2021.

News that GameStop is looking to digitize its stores has driven the stock up to January levels, but Gareth Soloway, chief market strategist said that on a technical basis, the stock looks overbought.

Earnings will continue to improve, and the rise in equity markets reflected the strength of the stocks themselves and had nothing to do with monetary stimulus, said Brian Belski, chief market strategist of BMO Capital Markets. "Stocks went up because they are the best asset in the world, and that’s why they went up," Belski said.

There is currently no uranium production happening in North America, which poses a national security threat to the nation, as nuclear power plants will need to rely on foreign sourcing of uranium, said Amir Adnani, CEO of UEC and chairman of GoldMining. Uranium is currently trading at $27.75 a pound, but miners like UEC need the price to rise to $40-$50 a pound before production becomes economical.

Yields cannot rise “hyperbolically” forever, and within the next 30 days they should mean revert, creating a very bullish environment for risk assets, said Frank Holmes, CEO of U.S. Global Investors. “The [10-year Treasury yield] has gone hyperbolic…it’s not like an airplane taking off, this is like a rocket going to space. Anytime you have something with a three-standard deviation move, it creates unexpected consequences in capital markets,” Holmes said “What we saw was the 10-year yield went above the S&P dividend yield and that automatically creates a flow of capital out of the stock market into bonds, and I think we’re going to get a correction here over the next 30 days, and that correction will be very, very positive for gold and silver, and the stock market, along with the crypto.”

A new commodity supercycle is showing signs of emerging, said Will Rhind, CEO of GraniteShares ETFs, and all commodities, the industrial, agricultural, precious, and energy sectors, will see a rise.

Historically, the gold miners have led the bullion market in price direction, and right now, the equities are suggesting a rebound in price is underway, said Pierre Lassonde, chairman emeritus of Franco-Nevada. "Right now, there is a bit of a discrepancy and it started about last week where in fact the gold equities are up when the gold bullion is down, so I'm kind of wondering whether or not we’re right at this particular point in the cycle where the equities are telling the bullion market that maybe there’s a turn coming," Lassonde said.

Patrick Victor, founder of No Nonsense Forex, and Ben Kennedy, Head of Business Development, ARYA Trading, discuss what it takes to excel in the trading world.

The 10-year yield has climbed to 1.56% Friday morning, but can rise to as high as 1.7% before the Federal Reserve steps in to intervene, said Peter Hug, global trading director of Kitco Metals.

The president and CEO of Fosterville South Exploration (TSX-V:FSX), Bryan Slusarchuk, likes to tout his neighbors in Victoria, Australia. Fosterville Gold Mine, owned by Kirkland Lake Gold, is one of the world's highest grade and lowest cost gold mines, and it is right beside Fosterville South Exploration. "At Fosterville South we've acquired and assembled over a multi-year process what we believe is the premier exploration ground in Victoria," said Slusarchuk, who spoke to Kitco last month.

Nominal yields rise on inflation fears, but beneath the hopes of an improving economy are deep, structural problems that will not recover anytime soon, said Todd Horwitz of BubbaTrading.com. Horwitz noted that most of the small businesses that were locked down will not be returning to business.

Both stocks and gold are showing technical chart patterns that suggest an imminent correction, said Chris Vermeulen, chief market strategist at TheTechnicalTraders.com. “It feels like the calm before the storm. I think this market, the stock market, is setting up for potentially a pretty big downdraft,” Vermeulen said.

The “honeymoon” phase of the stock market bull run is coming to a close, and as yields head even higher, stock indices could see a correction on the scale of 10-15%, said Gareth Soloway, chief market strategist of InTheMoneyStocks.com.

Bitcoin is still in a rapid adoption phase, with the peak of the current cycle at $200,000, said Greg King, founder and CEO of Osprey Funds. “I think we’re in a natural consolidation phase. Our view is that Bitcoin is in a bull run. It’s sort of in its fourth of fifth big bull leg of Bitcoin. If you look at it historically, as it’s gone through phases of adaptation, it puts in an all-time high that holds for at least 200 days, and once that happens, when that all-time high is pierced again, which we just had in November at $20,000, on average, the next bull run is a 900% return,” King said.

The net effect of trying to squeeze the silver is that "you will lose your money" said Jeff Christian, managing partner of CPM Group.

Gold has held a strong relationship with inflation expectations but more importantly, gold tracks real interest rates, so if nominal rates rise faster than inflation, then gold would see pressure, said Lobo Tiggre of The Independent Speculator.

Peter Hug, global trading director of Kitco Metals, breaks down the gold market’s recent price action and the next key support and resistance levels to watch for.

It's only a matter of time before Bitcoin "death spirals" down to its true intrinsic value, which is $0, said Steve Hanke, professor of applied economics at Johns Hopkins University.

Many of the factors that have held back platinum in the past, including demand, liquidity in the futures markets, and visibility, are now becoming tailwinds for the price, said Trevor Raymond, director of research at the World Platinum Investment Council. Platinum has risen 13% since the start of 2021.

On a technical basis, the sentiment for gold is undeniably bearish, said Gary Wagner, editor of TheGoldForecast.com.

Volatility is built into the “DNA” of cryptocurrencies; investors and traders should not worry about the price drops earlier this week, said Frank Holmes, executive chairman of HIVE Blockchain Technologies. Speaking on Ethereum and DeFi, Holmes said “I think that this is a phenomenal industry, and there’s going to be many new derivatives come from it, and it has nothing but blue sky, but extremely volatile.”

Platinum and silver have fundamental tailwinds from both rising inflation and improving economic conditions that will propel these metals to grow faster than gold in 2021, said Bill Baruch, president of Blue Line Futures.

Rising yields and a stronger dollar from earlier this week have put pressure on gold, but the long-term macroeconomic fundamentals have not changed for the metal’s bullish outlook, said Peter Hug, global trading director, who added that we are still in the early innings of a bull cycle. “I think gold has been mirroring the dollar and the dollar has been strengthening in the beginning of this week on the 10-year [yield] surging. Last Friday when we spoke the 10-year was trading around 1.12%, 1.14%, it’s now at 1.32%. So the yields on the 10-year have been going up this week and that has moved some assets into the dollar,” Hug said.

If you haven’t already bought into Bitcoin, or even the recent Dogecoin hype, it’s probably too late, and you should start looking into DeFi products instead, said Clem Chambers of InvestorsHub.com.