Tags: Sprott | gold | Canada | silver

Eric Sprott: What Goes Down (Hint: Gold) Must Go Up

Wednesday, 17 Apr 2013 10:26 AM

By John Morgan

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Gold magnate Eric Sprott is definitely bruised but hardly broken by the rout in gold prices, and is calling for a price reversal back up on account of financial crises and bad economic policies.

Sprott, founder of both Sprott Asset Management and Canada’s large bullion holder, Sprott Money, is in fact looking for prices to soar and hit new highs by the end of 2013.

In an interview with The Globe and Mail, Sprott compared the current pullback to 2008, when the price of gold fell 30 percent to $712 per ounce during the financial crisis, then rose to $873 by the end of the year, only to rally to $1,900 by September 2011.

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“I’ve always imagined that gold would hit a new high by the end of this year, over $1,900, so that is what I think,” Sprott said this week as gold hovered beneath $1,400 per ounce.

A turnaround in gold’s fortunes is sorely needed by Sprott’s family of resource-reliant funds, according to The Globe and Mail.

The company’s flagship mutual fund, Sprott Canadian Equity Fund, posted a year-to-date loss of 27 percent this week, the newspaper said. The Sprott Hedge Fund LP lost 34.2 percent in the year ended March 31.

Sprott told his investors to stay the course on a conference call Tuesday and even suggested purchasing more physical gold and silver.

“I can tell you that on the ground, Sprott Money, which sells gold and silver maple leafs, did a record number of orders” on Monday, he told The Globe and Mail.

Sprott maintains gold is safer than paper money that can be printed at will by governments. He cited the European debt crisis and weakness in the U.S. economy as reasons precious metal prices are headed back up.

Asked whether there was a scenario that would prove him wrong, Sprott replied, “Yes. Everybody stops printing [money]. The economy recovers. Governments get their debts under control. Ha, ha, ha.”

Gold rose in early trading on Wednesday after the recent price decline attracted Asian interest in buying the physical metal, according to Reuters

“The gold bull market is clearly over, at least for the medium-term future,” said Philip Klapwijk, managing director of Precious Metals Insights, Bloomberg reported.

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