Rick agrees that there is capital misallocation on locating and extracting gold from the ground. Precious metals historically have been the most volatile part of the resource market. Reasons for this include the narrative around gold and silver being more interesting than say that of copper and coal. There is an allure to it. Thus there is a flaw in the way investors think. Investors that focus on precious metals likely do themselves a disservice.
Gold itself has been strong this past year in spite of the dollar also being strong. This is unusual and encouraging. Investor fatigue in the gold sector is not the fault of gold it is the investor’s fault as they have unrealistic expectations in regards to time. Gold stocks haven’t kept pace this year probably because they did so well in 2016. Gold may never be good enough to satisfy the wild interest of speculators but indeed good enough for contrarians to make a tidy sum.
- Source, Palisade Radio
