Rick Rule talked with David Lin of Kitco News at the Vancouver Resource Investment Conference. Rule is the senior managing director at Sprott Inc., and he’s bullish on gold. During this discussion, Rule explains why, touching on a range of subjects including the Federal Reserve, the trade war, the US dollar, the bond market and more.
To kick off the interview, Lin points out that gold has been rather range-bound since the price spiked in the wake of tensions in the Middle East. Rule said this is a sign of a healthy gold bull market.
Some speculators, of course, want to see rapid escalation. Rapid escalations are usually followed by rapid de-escalation. This gold bull market is what you want to see.”
Rule said the same thing Peter Schiff has been saying. Gold is climbing a “wall of worry.”
This is a very, very healthy market that you’re seeing.”
Rule noted that there is still widespread confidence in the economy. There’s widespread confidence in currency and debt as well.
The fact that gold is doing well concurrently with the US dollar doing well is something we haven’t really seen since the year 2000.”
Peter has pointed out the similarities between what was going in the gold market in the year 2000 – the cusp of the dot-com bust – and today as well.
So, why is sentiment turning toward gold?
For one thing, real negative interest rates. That means the holding cost of gold is zero. There is no yield on sovereign debt. But more significantly, the sovereign credits themselves are not good. Rule pointed out the rapidly skyrocketing US debt.
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