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‘The case has never been better for gold’: Sprott CEO

Peter Grosskopf, Sprott CEO, joins The First Trade to discuss his company’s recent debut on the New York Stock Exchange, his thoughts on gold and why investors should keep an eye on it.

Video Transcript

BRIAN SOZZI: All right, from food to gold-- we also continue to watch the soaring yellow metal that is, in fact, gold. With us now is Peter Grosskopf, CEO of Sprott, which runs a number of trusts and ETFs focused on precious metals. He also just rang the opening bell at the New York Stock Exchange.

Peter, good to see you. And congrats on your stock now trading on the New York Stock Exchange. A big jump for you. Why did you make it?

PETER GROSSKOPF: Thanks, Brian. Yeah, it's an important move for Sprott. Most of our clients are in the US. Most gold investors globally invest in gold in US dollars. So for us, it's a natural reporting currency.

And it's just where are our client base is. So it's really important to connect with those clients. We can do it better with our own listing in New York.

HEIDI CHUNG: And Peter, we just have to talk about all of the precious [? metals ?] and gold as well. Given all of the uncertainty right now in the markets, no idea how these reopenings or reclosings are going to go across the US, a lot of people are saying that gold has more room to run. I want to get your thoughts on [INAUDIBLE] for the precious metal.

PETER GROSSKOPF: Yeah, Heidi, we do. We agree. It has a lot more room to run. And, in fact, the case has never been better for gold. Now you're getting a political uncertainty hedge working into the picture as well.

But mostly gold is a protection against the money-printing policies of the central banks. We don't see that stopping anytime soon. In fact, we see it accelerating. It looks like markets and economies will need more support for COVID going forward.

INES FERRE: And Peter, Ines Ferre here. So what's the next target that you're looking at for gold? Right now, it's at $1,782. Are you looking at $1,850?

PETER GROSSKOPF: Yeah, so it's working against resistance in the upper 17s. And it does take a while. Gold is an enormous market. It's very illiquid.

So I would say that concurrent with the next downdraft in the equity markets, we see it smashing through $1,800 and continuing on its way to more than $2,000 by the end of the year.

BRIAN SOZZI: Peter, so you see gold breaking through $2,000. What gets it to over $2,000? So you see another decline in stocks, I suspect. But how does the presidential election play in your Thinking

PETER GROSSKOPF: It's a very slow process for gold. It takes all markets into consideration. So yes, I think people are adding it for the political uncertainty and what may happen in the race and with tax rates and policies going forward. But more than that, I think it's a hedge against the credit markets and the amount of printing that's required to support those credit markets.

BRIAN SOZZI: How worried are you about inflation based on what the Federal Reserve is doing?

PETER GROSSKOPF: Yeah, it's a really tough question, because right now we're locked in a deflationary cycle while COVID sucks the economy down. But eventually, you have to think that this money printing goes someplace and that there'll be inflation coming within a year or two.

HEIDI CHUNG: Peter, you say there's more room to run for gold. So for investors who want to invest in gold, why are trusts and ETFs a good way to do so?

PETER GROSSKOPF: Well, they're very liquid. They track the gold price one for one. We like our trust. And the reason we founded them was because they're 100% backed by gold. And also they can be redeemed for the actual physical gold.

They have a tax advantage in the US as well. And they continue to gain in popularity with US retail investors.

BRIAN SOZZI: Peter, tell us a little about yourself. How did you get involved with Sprott? And what are some of your investing philosophies?

PETER GROSSKOPF: Well, I've been involved in the gold market since I started my career about 32 years ago. I came to Sprott because it was the number one name in the world for gold. And I am a believer in libertarian policies. So I've been worried about the central bank's hand in the economy for a long time. I think gold is a natural hedge to that.

And our mission at Sprott is to become the best in the world at gold investing. It's a global business. It's complicated. It's difficult. But we have the team and the presence now to do so.

BRIAN SOZZI: All right, we'll leave it there. Peter Grosskopf, CEO of Sprott, good to see you this morning. And congrats on the listing.

PETER GROSSKOPF: Thank you.