Rick Rule: What I Do When Markets Make No Sense

Which way from here? How do we separate what we know from what is unknowable? And how can we take prudent actions to both reduce risk and capitalize on high-probability of future gains, despite unprecedented and unpredictable forces at play?

- Source, Reluctant Preppers

Eric Sprott Announces Investment in Ely Gold Royalties Inc

Eric Sprott announces that, today, 2176423 Ontario Ltd., a corporation which is beneficially owned by him, purchased 9,375,000 units of Ely Gold Royalties Inc. (Ely Gold), pursuant to a private placement, at a price of $0.80 per unit for aggregate consideration of $7,500,000. Each unit consists of one common share and one-half of common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at an exercise price of $1.00 per share for a period of three years, subject to acceleration in certain circumstances.

Mr. Sprott now beneficially owns and controls 36,496,594 common shares and 19,711,442 common share purchase warrants of Ely Gold (representing approximately 23.2% of the outstanding shares on a non diluted basis and approximately 31.8% on a partially diluted basis). This acquisition resulted in a beneficial ownership increase in holdings of greater than 2% of the outstanding common shares from what was reported on the last early warning report. Prior to this acquisition, Mr. Sprott beneficially owned and controlled 27,121,594 common shares and 15,023,942 common share purchase warrants representing approximately 28.0% of the then outstanding shares on a partially diluted basis.

The units were acquired by Mr. Sprott, through 2176423 Ontario for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of Ely Gold including on the open market or through private acquisitions or sell securities of Ely Gold including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.

Ely Gold is located at 2833-595 Burrard Street, Vancouver, BC, V7X 1K8. A copy of the early warning report with respect to the foregoing will appear on Ely Gold's profile on SEDAR at www.sedar.com and may also be obtained by calling Mr. Sprott's office at (416) 945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).

- Source, Junior Mining Network

Rick Rule: When Gold Prices Will Finally Be Catching Fire

The commodities complex will likely see another bull run in the next three to five years, this according to Rick Rule, president of Sprott U.S. 

“My suspicion is that the next five years will be very good for natural resources investors, with precious metals enjoying a two or three-year bull market and somewhere towards the end of that bull market, the rest of the commodities complex catching fire,” Rule told Kitco News.

- Source, Kitco News

Sprott's Grosskopf: It's now 'mandatory' to hold gold as Fed supports infinity QE

The Federal Reserve is wrapping up its first regularly scheduled monetary policy meeting since the global economy was turned upside down because of the COVID-19 pandemic. 

Since early March, the U.S. central bank has thrown all it can at the growing economic crisis; in less than two months, it lowered interest rates to the zero bound range and introduced unlimited quantitative easing measures. 

Peter Grosskopf, chief executive officer at Sprott Inc., said that he doesn't think the Federal Reserve has much ammunition left but will continue to buy government debt to support the economy. 

"We do think the Feds end up being the subject of last support for the treasury market," he said. "The important subject in the market, the important theme is financial repression."

- Source, Kitco News

Sprott’s Peter Grosskopf: It will be much harder to get gold as Scotia winds down bullion desk

Physical precious metals investors continue to get hit with bad news after Reuters reported that Scotiabank would wind down its precious metals business by 2021. 

Peter Grosskopf, chief executive officer at Sprott Inc., said that this could add to the supply crunch for gold. The COVID-19 pandemic has already severely impacted the precious metals' global supply chain. "We were already having a tough time getting the amount of physical that we require. 

I think it's going to be that much harder," said Grosskopf. "It's almost the opposite of what's happening in the oil market right now." In 2018, Scotia unsuccessfully tried to sell its precious metals business and eventually downsized the department when it couldn't find a buyer. 

Grosskopf said that it is a surprise that Scotia decided to shut down its precious metals desk instead of looking for another buyer. "They had a very prestigious position as one of the top three traders in that business," he said.

- Source, Kitco News

Gold's Got Your Back in More Ways Than One

As we witness the epic collision between deflationary plunges in stock markets and oil vs. unbridled currency dilution by central banks, many long-time earners and savers are filled with dread or confusion about where these forces will leave our our income, our nest-eggs, and our futures. 

Rick Rule, CEO of Sprott Asset Management, returns to Liberty and Finance / Reluctant Preppers to answer viewers’ questions and to declare that there’s more to know about the vital role precious metals can play in our financial well being than many of us may have been told.

- Source, Reluctant Preppers

Crude Collapse Concerns COMEX

After watching front month NYMEX crude oil futures collapse into negative pricing on Monday, you should be sure to consider the possibility of an exact opposite scenario playing out one day soon in COMEX gold futures.

What happened Monday in NYMEX crude oil? It can be summarized this way:

• The May20 crude oil contract was scheduled to go off the board and into delivery on Tuesday, April 21.
• Anyone long the contract after Tuesday the 21st would be assumed to stand for delivery through the NYMEX facility in Cushing, Oklahoma.
• But storage facilities in Cushing are reported to be "full". As such, there is no need or demand for holding these May20 contracts into delivery. Where would you put it?
• Those parties that remained long the May20 contract thus needed to sell. However, to sell you also need a buyer—someone interested in adding a long or covering an existing short.
• And in this case, there were NO BUYERS. Thus, what you saw was a true bidless market.
• The result? See below:

Without any parties looking to buy creating an actual bid-ask spread, the bidless market is an environment where only sellers exist on the offer. Price then resets lower and lower until buyers finally emerge. In NYMEX crude, that "price" was actually NEGATIVE. Amazing.

And it was all caused by a glut of the physical commodity. With no demand for the underlying physical, the price discovered through derivative trading collapsed.

Consider now the potential for a diametrically opposite situation in COMEX gold. Why and how could this unfold?

• COMEX gold also has "delivery month" contracts that serve as the "front month" for trading purposes until they go off the board and into delivery—at which time the trading volume rolls into the next scheduled month.
• In delivery, anyone still long the contract can stand for delivery through the COMEX vaults in New York. (And now might also stand for fractional ownership of bullion bars in London, too.)
• But global demand for physical gold outstrips supply at present, as many refineries, mines, and mints are closed worldwide due to Covid-19.
• Thus we are seeing a growing need/demand to hold COMEX contracts into delivery. For the current month of Apr20, total gold deliveries on COMEX exceed 3,000,000 ounces. This is more than 3X the usual demand for a "delivery month".
• If an extreme shortage develops—or if any sort of "run" on the bullion bank fractional reserve system begins—demand for delivery through the COMEX and LBMA will soar.
• Demand for the front/delivery month contract will surge. However, to buy a contract, you will also need a seller—someone interested in adding a short or selling an existing long.
• And in this case, there may be NO SELLERS. Thus, what you may see is a true offerless market.
• The potential result? The exact opposite of what you witnessed Monday in NYMEX crude oil.

Could this opposite scenario actually play out in COMEX gold? You may be reluctant to say yes, as this type of situation would seem unlikely and unprecedented. However, prior to Monday, April 20, the idea of negative pricing for the world's most important commodity was similarly unlikely and unprecedented.

We now know that quite literally ANYTHING is possible in 2020. From global pandemics to economic collapse to QE∞ to -$40 crude. As such, a complete implosion and restructuring of the global pricing scheme for precious metal is not out of the question in the weeks and months ahead.

- Source, Craig Hemke via Sprott Money

Eric Sprott: Why is Silver Still $15? What is Going to Happen With Physical Shortages?

Eric Sprott: This is a Disaster, There is No Other Way to Describe it

Eric Sprott: What Happens to the Global Economy Now? Where Are Precious Metals Going Next?

Legendary Canadian investor Eric Sprott discusses the impact of the coronavirus on the global economy and the precious metals.

- Source, Sprott Money

Eric Sprott: The Devastating Impact of COVID-19 and How Central Banks Will React Moving Forward

Eric Sprott discusses the devastating impact of the coronavirus and how central bank reactions will affect precious metal prices in the months ahead.

- Source, Sprott Money

Mines Shutting Down, COMEX to Settle in Cash?

The virus pandemic is not only ravaging our personal lives, but also impacting business globally, causing many mines to cease operations. 

At the same time, crisis financial interventions are motivating even “Reluctant Preppers” to seek shelter for their funds in precious metals, resulting in a demand spike which is cleaning out the supply chain of physical gold & silver.

- Source, Reluctant Preppers