Wildly successful hedge fund manager Eric Sprott came into the "Breakout" studio from Toronto to tell us why he sees continued gains in silver and gold.
Sprott, the chief investment officer and CEO of Sprott Asset Management, doesn't see a bubble in gold, calling it wildly under-owned when viewed in historical terms. But if you want to get the genial Sprott really worked up, ask him about silver. Even at three-decade highs near $40 an ounce, Sprott says silver will rise significantly from here.
What would change his mind? Global stability and rational central bank behavior. Nothing, in other words.
When pushed, Sprott says $2,000 gold and $50 silver are possible in 2011. (Currently, gold is at $1,459 an ounce and silver is just above $39). But he's got the kind of macro bullishness that leads to buying any and all dips, as he believes higher levels for precious metals are inevitable.
"I've owned gold for 11 years, and I've never sold any of it," Sprott says with conviction. And gold is only his second favorite metal. As befitting a hedge fund manager, Sprott is betting on other assets declining in price as his precious metals soar. He's bearish on base metals -- those used in production -- and he's shorting financial and consumer-related companies.
Why should you care? Sometimes it's best to let the numbers speak for themselves. This is one of those instances:
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- precious metals
- base metals
- central bank