Sprott Inc, the precious metals-focused money manager, sees gold rising by the end of this year as weaker-than-expected economic growth drives stock prices lower.
“The next move on gold will be driven by an equity market correction,” Sprott chief executive officer Peter Grosskopf said in an interview in New York. “It’s a pretty safe bet that if equity markets start to look volatile and dangerous then a lot of money will flow into gold as a hedge to that.”
A recent spate of hawkishness from global central banks has pressured gold prices, which have fallen about 5 percent since early last month.
The Bank of Canada on Wednesday raised rates for the first time since 2010 and other central banks from the US Federal Reserve to the European Central Bank have indicated their willingness to tighten monetary policy.
Gold tends to weaken in periods of rising interest rates, which bolster the US dollar.
Yet Grosskopf said developed economies are not as strong as some economists are forecasting and rate hikes might not come as quickly as the market believes.
“We think the underlying economies and the strength of the economies can be debated,” he said. “If you look at the underlying statistics, it’s a lot less evident that the economy is strong.”
Coordinated global rate hikes amid low inflation could pressure stock markets and currencies, Sprott USA chairman Whitney George said.
“When you look at the history of the last 20 years, every time central banks have decided it was time to take the punch bowl away we’ve had quite a dislocation,” George said.
Strategists from Toronto-based Sprott see the potential for gold futures to break past US$1,400 per ounce by the end of the year under the right conditions, compared with US$1,228 on Friday.
Gold for August delivery this week rose 1.32 percent from last week’s US$1,212 per ounce.
“People haven’t placed a high priority on having a hedge because the punch bowl seemed to be relatively full,” Grosskopf said. “Gold is vastly underinvested by most investors, so it’s got a lot of growth ahead of it.”
He also sees potential upside in other metals, including silver, platinum, palladium, cobalt and lithium.
Other metals:
Zinc snapped a three-week streak of gains after inventories available to investors on the London Metal Exchange surged by the most on record.
Steel prices sagged on Friday. Reinforcement-bar futures retreated 2.9 percent to 3,551 yuan (US$523) per tonne on the Shanghai Futures Exchange.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
About 1,000 participants, including more than 200 venture capitalists, joined the Taiwan Demo Day in Silicon Valley on Saturday, the largest iteration to date of the event held ahead of Nvidia Corp’s annual GPU Technology Conference which runs from today to Thursday. Taiwan Demo Day, co-organized by the Taiwan Next Foundation and the Startup Island Taiwan Silicon Valley Hub, took place at the Computer History Museum in California, showcasing 12 teams focused on physical artificial intelligence (AI) and agentic AI technologies. Katie Hsieh (謝凱婷), founder of the Taiwan Next Foundation, said the event highlighted the strength of the Taiwan-US start-up ecosystem, with
DOMESTIC COMPONENT: Huang identified several Taiwanese partners to be a key part of Nvidia’s Vera Rubin supply chain, including Asustek, Hon Hai and Wistron Nvidia Corp chief executive officer Jensen Huang (黃仁勳), addressing crowds at the company’s biggest annual event, unveiled a variety of new products while predicting that its flagship artificial intelligence (AI) processors would help generate US$1 trillion in sales through next year. During a two-and-a-half-hour keynote address, Huang announced plans to push deeper into central processing units (CPUs) — Intel Corp’s home turf — and introduced semiconductors made with technology acquired from start-up Groq Inc. The company even said it was developing chips for data centers in outer space. At the heart of Huang’s speech was the message that demand for computing power
RSS