The CEO of Sprott US Holdings, Rick Rule, has caused eyebrows to rise with his recent predictions for where gold may head in 2018. Comments made by Mr Rule were very clear in what he expects to happen with gold during this year and how he sees the price of the liquid asset panning out for brokers.
Gold stocks to rise, not gold prices
One area that he was very clear about was the distinction between his views on what may happen in gold price and gold stocks this coming year. Although he expects gold prices to do well, it is not on the verge of a massive breakout in his opinion. Instead, it appears that Mr Rule expects gold stocks to be the one to watch this coming year.
In 2017, gold stocks were outperformed by gold prices, but 2018 may see the reverse if industry figures like Mr Rule are correct. The expectations around gold stocks are so low that their expected success could surprise many.
Gold mining stocks may be the key
In his recent comments at the Vancouver Resource Investment Conference, he noted that the large gold producers and intermediates are the stocks that should rise in 2018. In addition, Mr Rule also pointed out that smaller, third-tier stocks could also prove a wise investment too. These stocks are in companies that produce smaller amounts of gold but have a direct path to the single-asset companies that put the asset into production.
Research is still key before making any trade
As with any kind of stock trade, it is vital to do your research before parting with any money. In the case of the third-tier companies for example, it is thought they need to be producing at least 100,000 ounces a year to be viable interests. It is always worth looking at who is behind each possible trading opportunity too as you will then, in effect, be backing the most experienced talent in the business.
How will gold prices fare?
With all the talk of a good year for gold based stocks, many involved in trading will be wondering how the price of gold itself may fare in 2018. While the outlook is generally positive, it may be held back somewhat by public confidence in other factors. As a safe haven currency, gold tends to do well in times of crisis and this is not the case in general right now.