Kitco NEWS Interviews

From 2022 on, I’d be buying gold hand hand in fist, it’s going to hold up better than most commodities,” said Harry Dent, founder of HS Dent, who is calling for gold to see its final rally to $2,200 an ounce next year before falling to multi-year lows until 2022. "I’m expecting gold to go up…when this crisis starts to build next year, it’s going to see more stimulus, it’s going to go up at first. I have a target of $2,200,” Dent said. “$2,200 is the strong resistance in the coming months and then crash back down to its 2015 lows, around $1,000.”

The cyclical bull market for equities is over; after December, stocks will begin a secular multi-year decline, starting with a 40% correction by April, said Harry Dent, founder of HS Dent. "If we see another new low in the stock market, I predict we are not going to see new highs on the Dow, S&P, NASDAQ, biotech, you pick anything...you're not going to see new highs on anything for decades," Dent said.

Gold has broken a critical support level, but there is not much downside left, said Alain Corbani, portfolio manager of Finance SA, who forecasts $2,500 an ounce for gold's upside target. The metal will be caught between conflicting macroeconomic forces next year: slightly higher negative real interest rates, but a weakening U.S. dollar. While gold has a negative correlation with negative real rates, ultimately, the dollar will prevail as the dominant driver of gold during this current phase of the commodity cycle.

What is the short-term trend for gold? Is the long-term outlook still positive? How much, if any, of the metals should be in your portfolio now? Peter Hug, global trading director, answers these questions.

Bitcoin is becoming 'digital gold' and there is a case to be made for the recent price surge to continue to $100,000 by 2021, says Hong Fang, CEO of OKCoin, one of the largest crypto exchanges in the world. Fang argues that should bitcoin catch up to even 25% of gold's global market capitalization of $9 trillion, that figure would amount to a price range for BTC of $80,000 to $100,000.

2020 has seen a “phenomenal” inflow of gold-backed exchange-traded funds, fueling an investment-led rally, but while ETF inflows are still expected to be strong, 2020’s level of inflows would be hard to keep up. Jim Steel, chief precious metals analyst at HSBC, said that gold will average a price of $1,965 an ounce in 2021, owing to competing macroeconomic forces; accommodative monetary policy will continue to provide tailwinds, but an unwinding of geopolitical risk from a Biden Administration will ease the appetite for gold. “Gold is sensitive to geopolitical risk,” he said. “If we’re going to get some rapprochement on the trade issues between the United States and the other countries, and it’s not just one country, it could be from several, and we also get a charm offensive from the Biden Administration to U.S. allies or to others, and the geopolitical risks come down and there’s progress made on the trade front, then that would be negative for gold.”

Both the vaccines from Pfizer and Moderna are categorized as messenger RNA vaccines, and the technology behind this is relatively new, said Dr. Joe Schwarcz, director of the Office for Science and Society at McGill University. Schwarcz outlines the process by which Pfizer and Moderna conducted their vaccine trials, and explains why vaccines are very low-risk.

Gold price dropped $100, or 4.5% on Monday as Pfizer announced that its COVID-19 vaccine is 90% effective. The S&P 500 climbed 2.9%, the Dow is up 3.8%, and the NASDAQ is up only 1%, dragged down by companies that benefit from the work from home culture, like Zoom (-12%) and Netflix (-4%). Peter Hug, global trading director of Kitco Metals, said that these moves factor in expectations that are a bit ‘premature’.

"If Biden is sworn in, he'll shut the economy down this winter more than Trump would have. USD goes under the bus, stagflation is likely. They'll blame COVID-19, but for once, socialism might also get some of the blame for the trouble it causes..." said Lobo Tiggre of the Independent Speculator in a Tweet made last week.

Nothing has fundamentally changed in the economy to warrant a sustained rally in the stock markets, said Gareth Soloway, chief market strategist at InTheMoneyStocks.com, speaking with Kitco News at 3:45 pm EST on Monday. “I don’t believe anything major has changed. We knew a vaccine was going to come, the projections are still first quarter, early second quarter,” he said. “The same thing with Biden coming into the White House, it doesn’t change a lot of the economics of the market, so it does concern me and I used it to put on shorts today.” The Dow Jones rallied 800 points in the biggest single day gain in 5 months on Monday following Pfizer's announcement that their COVID-19 vaccine is 90% effective.

With the Republicans set to take the Senate and the Democrats already having the House, Matt Gertken, vice president of Geopolitical Strategy of BCA Research anticipates a divided government that is likely to result in no tax increases but potentially smaller, and delayed fiscal stimulus.

With odds now stacked heavily in Joe Biden’s favor, it’s now looking more likely that the next four years will see a Democratic president in the White House. E.B. Tucker, director of Metalla Royalty and “Why Gold? Why Now? The War Against Your Wealth and How to Win It” said that gold and gold royalty stocks still remain the ultimate weapons against the “war against wealth.” Tucker said that bigger government, more government intervention, and low interest rates are all likely to persist during a Biden Administration, creating tailwinds for gold. Tucker maintains $2,500 an ounce by the end of the year as his gold price target.

One of the main lessons from the last financial recession of 2008 is that the U.S. economy did not see double-digit inflation rates when quantitative easing was launched, said Steve Hanke, professor of applied economics of Johns Hopkins University. "All the gold bugs in the world said that the Fed was exploding its balance sheet, the narrow measure of money was going up very fast, we're going to have hyperinflation. No, we didn't have hyperinflation because the Fed is a very small part of the broad money picture, and broad money never grew very fast, it never grew more than about 5% per annum," Hanke told Kitco News.

The stimulus will happen no matter who wins and that is good for metals and gold, said Peter Hug, Kitco’s head of the precious metal division. Hug spoke to Kitco News Thursday as Republican and Democrat leadership continued negotiating a COVID-19 stimulus package in excess of $2 trillion. Some Republican senators are holding out, but Hug said a deal will happen because there is too much pressure from businesses and the states.

Presidential election uncertainty is going to continue to impact all markets, including gold, said David Erfle of JunioMinerJunky.com. Here's all the risks to look out for.

Not only are macroeconomic conditions still positive for gold, but the scarcity of supply also runs in the metal’s favor, according to Rahul Paul, president of Radisson Mining Resources (TSXV: RDS.V).“Because of the lack of spending over the last several years, we haven’t seen as many new discoveries, so we’re now beginning to see a scarcity premium. We’re essentially running out of gold reserves, which is why investors, for that matter large producers, are now looking at and paying more attention to exploration companies like Radisson,” Paul said.