Kitco NEWS Interviews

Gold is not purely an inflation hedge, but more of a hedge against real interest rates, and rising bond yields that have outpaced the growth of inflation expectations has been weighing down on the precious metal, said Lyn Alden, founder of Lyn Alden Investment Research. “What gold really does is it protects you from an environment where inflation is much higher than the bond yields, and that’s what we’ve seen in 2020 is that gold over the past couple of years had a pretty big appreciation because it was protecting against that. Now, since about late summer 2020, negative real yields have been roughly flat,” Alden said.

Bitcoin does not fit the narrow definition of what a Ponzi scheme is, said Lyn Alden, founder of Lyn Alden Investment Strategy, who said that $50,000 is the next resistance level.

There are roughly 2 ounces of silver and more than 100 kg of copper in an electric vehicle like Tesla, said Gianni Kovacevic, CEO of CopperBank. Kovacevic said that it is unlikely automobile manufacturers have been trying to suppress the prices of silver and copper. “As for electric vehicle manufacturers having some sort of a cabal to suppress the price of silver, I don’t buy into that. It’s a commodity, it does have some monetary features, which is unique to itself, but there’s going to be a lot of demand for silver,” he said, adding that silver is going to be more scarce. “I would say that you’re not going to be betting against it.” According to the Silver Institute, battery electric vehicles (BEVs) consume 0.8-1.6oz (25-50g) of silver.

The current bull market cycle in the metals is far from over, and the Federal Reserve would need to reverse course on monetary policy before we see a top in prices, said Peter Hug, global trading director of Kitco Metals.

Relative to the price of gold, gold and silver miners are at their lowest valuations since 2016. David Erfle of TheJuniorMinerJunky.com explains the macroeconomic forces behind low valuations and what this means for investors.

Until the Federal Reserve reverses course on monetary policy, the current bull market in equities, the longest in U.S. history, is only going to continue, said Mark Skousen, editor in chief of Forecasts and Strategies.

Tesla has stated in its latest annual report that the company has updated its investment policy to now include Bitcoin, gold, and “other assets” as possible investments. While this move may move the price of Bitcoin, it would have limited direct effect on gold prices, said Alex Mashinsky, CEO of Celsius Network.

If every company in the S&P 500 puts 10% of their cash into Bitcoin, the cryptocurrency then becomes a trillion dollar market, said Gary Wagner, editor of TheGoldForecast.com. While gold is climbing slow and steadily as opposed to Bitcoin’s sudden burst into new all-time highs, similar to the “tortoise and the hare”, Bitcoin has higher upside potential in the short-term, with an upside target of $61,000, and a downside correction floor of $39,000, Wagner said.

Individuals and institutions have different solutions when it comes to protecting cryptocurrency wallet keys, said Diogo Monica, president of Anchorage.

If Bitcoin retraces $20,000 and falls below that key support level, then “something is wrong” said Florian Grummes, managing director of Midas Touch Consulting. In the medium term, investors can expect the price to touch $50,000 to $100,000, with the current bull cycle targeting $300,000 a coin, Grummes said. “If Bitcoin does the same thing in the last bull market in 2016 and 2017, we’re going to $320,000 this time,” he said.

Ethereum, while outperforming Bitcoin in 2020, has been living in the larger cryptocurrency's shadow, but it's only a matter of time before prices double again from here, said Brian Norton, COO of MyEtherWallet.

GameStop shares fall by 60% on Tuesday, as the price hit $90. "I think the GameStop move is pretty much done," says Chris Vermeulen, chief market strategist at The Technical Traders.

The silver price dropped 10% on Tuesday as the CME raised margin requirements for silver contracts. Peter Hug, global trading director of Kitco Metals, said that the silver squeeze attempt has now “backfired” as bullion inventories have run dry as a result, and with premiums up and few physical products to sell, it is now even more difficult for retail investors to push the price up.

The demand surge of silver has completely overwhelmed the supply, and orders are not able to be filled now, said David Morgan of TheMorganReport.

Silver climbs $1.64 as of the 6:00 pm EST market open on Sunday as demand surges, pushing the price to 6-month highs. Phil Streible, chief market strategist at Blue Line Futures, said that a $40 to $50 target from here for silver is not impossible.

Bitcoin is one of the most unequally distributed assets in the world, with just under half a percent of all bitcoin investors owning more than 80% of all bitcoins, and should they liquidate, the market could see a substantial sell-off, said Ryan Giannotto, director of Research at GraniteShares ETFs.

Gold’s reaction to bad economic data continues to be weakness; the precious metal is down almost 1% on Friday. Peter Hug, global trading director of Kitco Metals said that it is only a matter of time before the metal reverts course.

Opportunities lie for base metals to outperform gold this year, said Kai Hoffmann, CEO of Soar Financial Group. “With Biden moving into the White House, the Green initiative has been taking a lot of the news, so nickel, cobalt, and uranium, to a degree,” Hoffmann said. “Gold might be left behind a little bit in terms of the attractiveness [relative to] the other commodities.”

An artificially boosted economic recovery will come by spring time, but the equities markets are still in danger of a sharp pullback, said Gerald Celente, publisher of the Trends Journal.

More retirees are rushing into equities, especially stocks with high dividend yields, but the sentiment on equities markets has now reached mania levels, said Peter Grandich, founder of Peter Grandich & Co.

Given the political and economic environment that we’re in, gold should be much higher, said E.B. Tucker, author of “Why Gold, Why Now.” Tucker had predicted gold to hit $2,500 an ounce by year-end of 2020, he is now updating his views and sees the price to hit that level by next year.

As bitcoin price fell by 20% on Monday, some traders are anxious to know if now is the time to buy. Todd Horwitz of BubbaTrading.com is waiting for this pullback to continue some more.

Investors are dumping lower yielding assets like gold to buy higher volatility securities like Tesla shares and bitcoin, said Gareth Soloway, chief market strategist at In The Money Stocks, but Soloway is not selling his gold yet. Soloway’s comments come as Friday’s nonfarm payroll report showed a loss of 140,000 jobs in December, the most since the start of the pandemic.

A Democrat lead in the Georgia Runoffs election should be positive for gold, as more stimulus can be expected from a Democrat-controlled Senate, but instead, gold prices fell today.

When something goes straight up, it usually comes straight back down said Chris Vermeulen, chief market strategist at The Technical Traders, referring to bitcoin's recent parabolic move upwards. Gold sees upside to the $2,400 an ounce level in 2021 but faces risks of a possible stock market correction that could drag the metal down.

Whether the Democrats or Republicans take the two Senate seats in Georgia will determine how much stimulus the economy will get, said Peter Hug, global trading director of Kitco Metals.

The "future" is already happening now, and copper stands to benefit the most from the electrification of our economy, said Gianni Kovacevic, CEO of CopperBank.

2021 is not going to be the year of another market crash, said Frank Holmes, CEO of U.S. Global Investors. In fact, the economy is expected to see a substantial rebound, followed by a rally in gold, stocks, and bitcoin.

Gold bullion and gold stocks are different asset classes that serve different purposes; the former is a currency that hedges against fiat currencies, while the latter is more risky and gives leverage to the metal, said Whitney George, president of Sprott Inc.

America is facing a generational crisis where younger people have no wealth built up and lack the financial literacy to do so, said Kevin O’Leary, star of Shark Tank and chairman of O'Shares ETFs. “In America today, there’s 100 million people that have nothing set aside for retirement,” O’Leary said. “That is a failure of financial literacy that started as far back as the 1970s.”

Kevin O’Leary, chairman of O’Shares ETFs and star of Shark Tank, said that the digitization of America is here to stay, even if the economy opens up again. O’Leary has sold off his commercial real estate holdings to redeploy capital into the technology, healthcare, and consumer service sectors. On gold, O’Leary sees the metal as a hedge against inflation, and contrary to what some analysts think, it will not be replaced by bitcoin anytime soon.

Commodities, including gold, have been seeing initial signs of a long-term bull supercycle, said Steve Hanke, professor of applied economics at Johns Hopkins University.

The equities markets have reached a top and are due for a pullback by about 15% - 20% in the New Year, said Gareth Soloway, chief market strategist at InTheMoneyStocks.com. “We’re now getting to a point where we have such inflated valuations that if you don’t get this monstrous beyond 35% earnings growth [that some analysts are forecast] then markets are going to sell-off pretty sharply,” Soloway said.

Northern Vertex (NEE.V) has announced a merger with Eclipse Gold Mining Corporation (EGLD.V). “Our goal has been organic growth but also growth through consolidation. This merger offers the shareholders of Eclipse an opportunity to be part of a producing mine, a mine that has been actively developed and has transitioned from exploration through the production of the last half a dozen years,” said Ken Berry, CEO of Northern Vertex.

With lockdowns resuming in Europe, concerns rise that London, a major vaulting center, will face logistical challenges in transporting and servicing gold and silver bullion, similar to what happened in March that led to shortages of the physical precious metals markets. Ruth Crowell, chief executive of the London Bullion Market Association (LBMA), said that vaults and service providers are more prepared this time around. “This is something we talk about in terms of potential market disruptions, and part of our role in terms of being that point of contact for the infrastructure providers here in London is talking to the vaults and the carriers about how are you ready…for COVID challenges as well as Brexit challenges. I think the overwhelming response is that they’re very prepared,” Crowell said. “And in some ways having had the challenges of the pandemic in March and April has made the market more resilient to those challenges up ahead.”

$10,000 gold price would mean the end of the financial system, as we know it. Peter Hug, Global Trading Director of Kitco Metals, talks about likely scenarios for inflation, the economy, gold, and silver for 2021.

Jaime Rogozinski founded WallStreetBets to create a forum for young traders to share trading ideas, especially those of higher risk. Today, it is the largest subreddit on trading, and one of the most popular online communities for young traders. Rogozinski shares his favorite trading anecdotes from the forum.

The broad equities index remains the only “threat” to gold and gold investors, said Rick Rule, president of Sprott U.S. The “existential crisis” facing the gold sector comes from the lack of exploration activity from miners.

Gold investors are prone to making common mistakes that can be detrimental to a portfolio, including excessive diversification, picking companies that don’t adhere to an investment objective, and not sticking with management teams with proven track records, said Rick Rule, president of Sprott U.S. “If I had just hung out with the Ross Beatys, the Bob Quartermains, the Robert Friedlands, the Lukas Lundins, all of them I’ve done business with, by the time I was 35 and not bothered with the rest of the universe, I would have worked less hard and made more money,” Rule said.

Gold has bounced back from its support level of the low $1,800s, and is on track to touch $1,920 by Christmas time, said Peter Hug, global trading director of Kitco News.

Silver may be Thomas Kaplan's first love as he sees the potential for the precious metal to eventually push to $100 dollars; however, he is also not giving up on gold as he sees the yellow metal in the third-wave of a secular bull market that will take it "way past new highs." He noted that gold was in a strong uptrend well before the COVID-19 pandemic devastated the global economy. "All the pandemic has served to do is to make people now understand that the question of money and what is money when clearly it can be printed at will, he said. "The debasement of currencies is obviously very, very bullish for gold.”

For the first time in 20 years, Thomas Kaplan, CEO of Electrum Group, has launched a new public silver producer. In an exclusive interview with Kitco News, Kaplan talks about his silver and gold projects and his outlook for the precious metals. In November, The Electrum Group went public with Gatos Silver (NYSE: GATO, TSX: GATO), which raised $170 million in its IPO. It was also one of the first precious metals companies listed directly on the New York Stock Exchange. Looking at commodity prices, Kaplan said that gold and silver are just at the start of a significant bull market. "Once silver stabilizes and gold is going up as some monetary metals, silver then starts to follow gold and then it gets octane and it surpasses gold," he said. "That's what happened during the financial crisis and we are starting to see that again."

Even though a bear case for gold is unlikely to happen, investors should not be sailing with their eyes closed and ignore the possibility of a pivot in fiscal and monetary policies, which would drag gold prices down, said Lobo Tiggre of the Independent Speculator. “It’s not something that keeps me up at night. It is something worth thinking about,” Tiggre said. “Here’s the scary thing, [gold] could go quite low. If you look at the big correction in the middle of the 1970s bull market, that was on the order of 50%.”

There’s simply too much money injected into the monetary system by central banks to allow a sizeable bear market to take place soon, said Jim Rogers, investor and chairman of Rogers Holdings. “Many stocks in the U.S. are down in 2020. There are a few stocks that are going through the roof every day. Some parts of the U.S. market are developing a beginning of a bubble, but many parts of the markets are not, that’s why I suspect [this rally] is going to go on for a while,” Rogers said.

Another 40% move in gold in 2021 is "very doable" says Frank Holmes, who is looking for a range of $2,200 to $2,600 an ounce. Cryptocurrencies will continue to do well; Bitcoin will be driven by increased adoption, while Ethereum benefits from the latest developments in DeFi.

Bitcoin is like a call option to the emergence of cryptocurrencies in the world, said Raoul Pal, CEO of Real Vision. "I've never seen anything like what is going on right now. You have a limited supply asset that now is a globally recognized brand that everybody knows, but not everybody understands. What's happening now is institutions are coming into the space," Pal said. More information about cryptocurrencies from Raoul Pal can be accessed at Real Vision Crypto: https://www.realvision.com/crypto.

Bitcoin may have hit new all-time highs, but not enough momentum is here to sustain this rally, and a pullback towards $15,000 to $16,000 may happen before the price climbs higher still, said Alex Mashinsky, CEO of Celsius Network. Mashinsky has correctly predicted that bitcoin would breach the 2017 highs this year, which it did earlier this week.

If Raoul Pal, CEO of Real Vision, had to choose one place to make a 5-year investment, it would be in emerging markets. “Very simple asset allocation. I’d buy bonds in case this economic growth doesn’t appear because the virus goes on longer, the vaccine takes longer to roll out, and we’ve seen shut downs in Europe and I think we’re going to get them in the U.S.. So buy bonds and buy emerging markets,” Pal told Kitco News. “If growth comes back, you’ll make a huge amount of money in emerging markets.”

As the economy recovers, consumers are likely to rotate spending out of retail items and into other, bigger discretionary purchases, like vacations, said Gareth Soloway, chief market strategist at InTheMoney Stocks.

Sustained low interest rates, coupled with large levels of debt and an eventual return to inflation will be the dominant drivers of gold in 2021, said Kevin Rich, consultant to the Perth Mint.