Peter Grosskopf: Investors Should Use Gold as a Diversification Strategy

TL;DR

Investor sentiment in the gold market is currently poor due to changes in asset management, creating buying opportunities. Sprott remains bullish on gold and sees it as a diversification strategy amidst bubble levels in equity and bond markets.

Transcript

I am Nicole Rashad the investing news network and I'm here on day two of mines and money New York with Peter Krause Club CEO of Sprott how are you today I'm well thanks for talking to me thank you for talking with us and how was conference been so far well I just kind of got here I'd been doing some other meetings in New York and looks looks good e... Read More

Key Insights

• 😘 Gold investor sentiment is currently at its lowest due to lack of performance and changes in asset management.
• 🥺 Confidence in the global financial system is high, leading to poor sentiment in gold as it serves as a contrarian signal.
• 🏅 Gold's performance is correlated with the stock and bond markets, sinking when they perform well.
• 🐢 Gold has made progress in diversifying its customer base through technology platforms, but the inflow of dollars has been slow.
• 🏅 Sprott remains bullish on gold and believes it is a prudent diversification strategy.
• 🤱 Sprott offers an attractive investment opportunity through its royalty-like platform, managing funds with potential for growth and performance fees.
• ✋ Despite the lack of buying interest in gold equities, Sprott is actively raising and deploying funds, identifying buying opportunities, and high-grading its portfolio.

Questions & Answers

Q: How does investor sentiment in the gold space compare to other financial markets?

Investor sentiment in the gold market is at its lowest due to lackluster performance and changes in asset management that have favored larger companies. The lack of buying interest in small gold companies has further worsened sentiment.

Q: What is the current sentiment towards gold and why?

The current sentiment towards gold is poor because confidence in the global financial system is high, with the belief that debt levels are sustainable and central banks will provide liquidity. Gold serves as a contrarian signal to this confidence, leading to negative sentiment.

Q: Has gold successfully diversified its customer base?

Gold has made progress in diversifying its customer base through technology platforms that enable payments, digitization, and trading. However, the inflow of dollars into the market through these new technologies has been disappointing so far.

Q: What does Sprott's outlook for gold in 2019 look like?

Sprott remains bullish on gold and sees it as a diversification strategy amidst bubble levels in equity and bond markets. The company is actively raising and deploying funds, high-grading its portfolio, and identifying buying opportunities.

Summary & Key Takeaways

• Gold investor sentiment is at an all-time low due to lackluster performance and changes in asset management favoring larger companies. This has created buying opportunities for contrarian investors.

• Sprott CEO believes that gold is a contrarian signal to the high confidence in the global financial system and that the current sentiment is poor. Gold's performance is currently correlated with the stock and bond markets.

• Gold has made progress in diversifying its customer base through technology platforms, but the inflow of dollars into the market has been slow. Sprott hopes that the next favorable gold market cycle will bring momentum to the new technologies.