Randy Smallwood: There's Only One Thing Holding Precious Metals Back

TL;DR

Gold and silver prices are on the rise, and the CEO believes this trend will continue due to the weakening US dollar. Investing in streaming companies like Wheaton Precious Metals is advantageous as their costs are fixed and they benefit from price movements in precious metals.

Transcript

I'm Charlotte McLeod with the investing news network and here today with me is Randy Smallwood president and CEO of wheat and precious metals and thanks so much for joining me today glad to be back great and we're here at sprout natural resource symposium let's start by talking about gold and silver prices they are both up this year is that growth ... Read More

Key Insights

• 💪 Gold and silver prices have been strong, and the CEO believes this growth is sustainable due to the weakening US dollar.
• 🧭 Streaming companies like Wheaton Precious Metals benefit from fixed costs and pass on price increases to their shareholders.
• 📼 Investors should focus on the quality of assets when choosing between different streaming and royalty companies.
• 🤘 Mergers and acquisitions are likely to continue in the precious metals industry as companies seek growth opportunities.
• 😮 The US dollar's strength is the main factor holding back gold and silver prices, and when it weakens, precious metals are expected to rise.
• ☄️ Wheaton Precious Metals' Q2 results are coming up, and their focus remains on corporate development and identifying acquisition opportunities.

Questions & Answers

Q: Why does the CEO believe gold and silver prices will continue to rise in 2018?

The CEO believes that the US dollar's strength is unsustainable, which will likely lead to higher gold and silver prices in multiple currencies.

Q: How do price movements in precious metals impact streaming companies like Wheaton Precious Metals?

Streaming companies, unlike traditional mining companies, have fixed costs and pass on any price increase directly to their shareholders, resulting in higher operating cash flows and margins.

Q: How do investors choose between different streaming and royalty companies?

Investors should consider the quality of assets as the foundation of any company. Wheaton Precious Metals emphasizes technical due diligence and focuses on high-quality assets to differentiate themselves from competition.

Q: Will mergers and acquisitions continue to be a trend in the precious metals industry?

Yes, as established companies struggle to deliver organic growth, mergers and acquisitions become an attractive option. The lack of investor support in the resource sector has created opportunities for undervalued assets.

Summary & Key Takeaways

• Gold and silver prices have been increasing in multiple currencies, except the US dollar.

• Silver is the high beta play on precious metals and has historically outperformed gold in terms of price movement.

• Streaming companies like Wheaton Precious Metals benefit from fixed costs and deliver strong cash flow and margins.