With stocks plunging and gold and silver still consolidating recent gains, today King World News interviewed billionaire Eric Sprott, Chairman of the $10 billion strong Sprott Asset Management to get his take on the action. When asked about gold Sprott replied, “I think it’s explosive. As you know James Sinclair said, ‘When it goes through $1,764 it’s going to $12,000,’ and I for one am not ruling out that kind of development here. It could be very explosive as more and more people worry about one, fiat currencies, two, sovereign debt and three, bank deposits. It would take very little to spill into gold to make a dramatic difference in where the price will be.”
When asked about the mining shares Sprott stated, “I think it’s becoming obvious to everyone that it’s the one area that you can feel safe to invest in. We are witnessing events unfolding that are suggesting to us that we are finally seeing a differentiation in the market between gold stocks and general stocks.
One of the key days was August 19th and on that day the Dow was down something like 500 or 600 points and the HUI gold index was up 4%. When you can outperform an index by 800 basis points in one day, it’s telling you that things have changed.
We all recall that in the last serious market selloff in 2008, the gold stocks got hammered. This time when the markets are weak, typically the gold stocks and gold have done well. So there have been a lot of things that have changed in the market just recently, that are telling us the market is looking at gold very, very differently than it has in the last ten years....
“The outlook for gold stocks is particularly exciting right now. I think we can get a 50% move out of the gold stocks between now and December 31st. And of course if gold and silver really get lit up here, I mean who knows? We could go up hundreds of percent in these gold stocks in the next eighteen months.”
When asked about silver specifically Sprott remarked, “It could be a wild ride here. As you know there are groups that are short silver and they’ve lost a lot of money already. I think they are very active in the market and create these days where there are sudden downdrafts, but sure enough silver always comes back. The physical buyers always wear down the paper pushers.”
When asked where he sees the price of silver headed Sprott responded, “I think silver will outperform gold in the next decade. If silver should trade at a 16 to 1 ratio (to gold), it will probably trade at 10 to 1 because things tend to overshoot. Let’s use Jim Sinclair’s $12,000 target, that would suggest $1,200 silver, which is a thirty bagger from here...The biggest reason it (silver) should go there is people should fear bank deposits, that’s what I think they should fear.”
Eric Sprott covers gold, silver, mining shares and much more. The outstanding KWN audio interview with Eric Sprott is available here.
Source: King World News
Eric Sprott covers gold, silver, mining shares and much more. The outstanding KWN audio interview with Eric Sprott is available here.
Source: King World News
