Sprott Asset Management CEO Eric Sprott is very long on gold and not very optimistic about cyclical metals like copper.
“Gold looks better today than it ever did before,” Sprott says, because of ongoing sovereign debt concerns in Greece and other "PIIGS" nations — Portugal, Italy, Ireland, Greece and Spain — as well as easy monetary policies across the globe.
“Some of the smartest investors in the world” are bullish on gold, the Canadian hedge fund manager says.
Tuesday, Gold for June delivery jumped $8.20 to settle at $1,162.20 an ounce on the Comex division of the New York Mercantile Exchange.
Meanwhile, “I still have a deep, deep concern over leverage in the banking system,” Sprott said, noting the inability of governments who are spending vast amounts of money to generate much growth in GDP.
“There’s been some excellent work done on how the marginal value of a government dollar spent is now negative,” Sprott told CNBC. “We’re not getting much bang for our buck, but we still own the buck at the end of the year.”
Sprott says his hedge fund’s newly launched physical gold trust ETF (which trades under the ticker symbol PHYS) is superior to other gold funds because investors can redeem their shares for physical gold.
Also, the counterparty for the PHYS is the Royal Canadian mint, rather than a “levered financial institution” and capital gains are taxed at 15 percent because it is considered a collectible.
“If you want the safety of gold, buy the physical stuff and put it somewhere safe – and close at hand,” says Resource Prospector’s Kevin McElroy.
“Buy from a reputable vendor that offers a buyback guarantee.”
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