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Rick Rule: Gold Is Insurance and You Want to Have Insurance
Rick Rule: Gold Is Insurance and You Want to Have Insurance
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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Peter Schiff: ‘The Price Of Gold Is Going To Soar’ And ‘The Dollar WILL Collapse’
Peter Schiff: ‘The Price Of Gold Is Going To Soar’ And ‘The Dollar WILL Collapse’
Peter Schiff recently attended the Vancouver Resource Investment Conference. While he was there, he did an interview with Daniela Cambone of Kitco News and Schiff said gold is going to soar.
But Schiff (who predicted the 2008 recession) also explains why he believes now may be a good opportunity to invest in physical gold. Schiff said that the standard sentiment shared by many is that once the Federal Reserve jacks up interest rates, gold will stay level and unaffected. But that didn’t happen. Schiff said that the yellow metal has surprised the initial expectations that it would fall when the Fed raised rates; gold has climbed 9% since the Fed hiked last month.
Gold has not really rallied. It’s been going up, right? But it’s been creeping higher. Now, everybody expected it to fall. Everybody believed that as soon as the Fed hiked rates, gold’s gonna tank. And it didn’t tank. It rallied. -Peter Schiff
Investors tend to sell the rumor of rate hikes and buy the fact when in reality, the higher interest rates are not bearish for gold. But as Peter points out, that mindset still exists in the market.
But you know, the Fed keeps raising rates a little bit, every once in a while, and everybody still believes that, well, the Fed is raising rates, so that’s bearish for gold. So, everybody expects gold to fall, yet it continues to creep higher. But I think once it overcomes some of this resistance – it has a lot of resistance around $1,350 – and I think if we can decisively move above that and then get above $1,400, just to make sure it’s cleared out, then I think it’s off to the races.
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Rickards: “There Are Three Things Going On With Gold Right Now”
Rickards: “There Are Three Things Going On With Gold Right Now”
Jim Rickards joined Kitco News and Daniela Cambone to discuss the latest news and analysis from gold markets, geopolitics and even bitcoin. The Wall Street veteran took on the bigger picture facing metals investors and what could be just around the corner in a bubbling market.
Jim Rickards is the editor of Strategic Intelligence and is the New York Times best-selling author of The Road to Ruin. Rickards’ worked on Wall Street for decades and has advised the U.S intelligence community on international finance, trade and financial warfare.
When asked why certain geopolitical tensions have greater impacts on gold and hard assets than others Rickards remarked, “There are two things going on,
“… first is that the North Korean missile threat goes from high tension to back down again. This is a very serious threat and we are headed for war with North Korea. While I don’t know what it will take to not just get gold to go up but stocks and other sectors, ultimately markets are going to be impacted.”
“People seem to have very short attention spans but that’s not how to think about it. It’s possible to see that Kim Jong-un is not deviating from his path to get nuclear weapons, the U.S will not allow it. There’s no middle ground there. It would be great if we could have diplomacy. I think we should also ratchet up sanctions on China. But I don’t see either of those happening.”
“Don’t underestimate the extent to which gold is being impacted by hedge funds, leverage players, and others that are in the mix for the current high in gold. They don’t really care if it is gold, soybeans, etc. but it is simply another commodity. They receive a nice profit with tight profits, tight stops.”
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