Sprott's Thoughts

After spending three years in a $250 trading range (between $1,121 and $1,375), spot gold has erupted since late May and is up 18.01% YTD as of last Friday's (8/15) close at $1,523.34. At the same time, gold mining equities, as measured by Sprott Gold Miners ETF (SGDM) are up 39.52% YTD.

Gold has outperformed equities and bonds since the dawn of radical monetary practices by world central banks.

On the surface, activity in precious metals markets was subdued during the week ended Friday, April 26.

We believe a new gold mining mergers and acquisitions (M&A) cycle has been ignited, and we expect this merger boom to accelerate over the next several years.

“Modestly,” because spot gold traded essentially flat, declining 0.1% to $1,290.35, in concert with flat 10-year Treasury yields (down 1 basis point).

The big central banks are all on the same page, blaming those nasty “external forces” for economic slowdowns

Gold provides the capacity to remove virtually unlimited amounts of capital from the vagaries of the global financial system at a moment’s notice.

Gold recovered the $1,300 level and came off lows of the month as the dollar weakened and as Brexit jitters permeated investor sentiment.

We believe that gold bullion and gold mining equities may be poised for a multi-year uptrend.

Volatility in global equity markets, the outlook for the Federal Reserve and a weakening dollar, pushed gold out of the doldrums for the year.