Sprott's Thoughts

Gold bullion¹ continued to deliver strong performance and was up 14.04% YTD through May 31, 2020, and 32.54% YOY. At the same time, gold mining equities (SGDM)² have gained 18.26% YTD, and 61.70% YOY as of May 31. This compares to -4.97% YTD and 12.84% YOY returns for the S&P 500 TR Index.⁶ Silver posted substantial gains in May and is on the move again.

Gold bullion continued to deliver strong performance and was up 11.15% YTD through April 30, 2020, and 31.39% YOY. At the same time, gold mining equities (SGDM)1 have gained 13.81% YTD, and 58.67% YOY as of April 30. This compares to -12.36% YTD and -7.91% YOY returns for the S&P 500 Index.

Gold is on the cusp of breaking out to all-time highs in U.S. dollars and has already done so in virtually every other currency. Gold mining stocks continue to lag the metal and, in our opinion, represent a compelling investment opportunity at this moment.

This week, the U.S. Federal Reserve (the "Fed") made a surprise interest rate cut of 50 basis points on Tuesday, March 3.

Fueled by lower interest rates worldwide and the growing risk-off sentiment, gold is proving its mettle as a safe-haven investment and non-correlated portfolio diversifier.

The conclusion of The Fed's latest FOMC meeting, and the remainder of this week brings all sorts of U.S. economic data. All of this will impact gold and silver prices...but in which direction?

2019 has been gold’s year to shine, given its double-digit rise YTD. Gold mining equities have also posted notable returns

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.