2021 is now half over, and so far the second part of the year has been positive for the gold price.
The yellow metal has been on the rise since the start of July, moving from around the US$1,770 per ounce level to just above US$1,800 at the time of this writing on Friday (July 9).
Despite that increase, many market participants believe gold should be higher. This week I heard from Rob McEwen of McEwen Mining (TSX:MUX,NYSE:MUX) on why he thinks gold hasn’t broken out.
Rob is well known for his US$5,000 gold prediction, and in his opinion, there are a few factors holding the precious metal back. Those are the belief that inflation is under control, the idea that gold is an “old-school investment” and broad market strength.
“I suspect the key factors that are holding it back are a broad belief that inflation is under control, that gold is an old-school investment and no longer relevant in a digital world and the strength of the broad market” — Rob McEwen, McEwen Mining
However, he has a clear idea of how the situation could change — Rob believes that once inflation is more widely recognized, that will be gold’s cue to perform.
With gold and the start of a new quarter in mind, this week we asked our Twitter followers to tell us where they think the gold price will be at the end of the quarter. By the time the poll closed, respondents were split fairly evenly between US$1,800 to US$1,900 and US$1,900 to US$2,000.
Rob also spoke about copper, sharing the details of McEwen Mining’s plans to move its copper assets into a new subsidiary called McEwen Copper and eventually take it public.
The idea has been in the works for some time now, but the company is acting now because of the positive outlook for the red metal; Rob also said the market seems to prefer a copper-only company vs. a precious metals company with a copper asset.
“I feel that the demand for copper is going to increase with the growth of Asia, with the growth and the proliferation of electric vehicles and (copper’s) use in regenerative energy. I think we’re entering a strong period of demand for copper” — Rob McEwen, McEwen Mining
Los Azules in Argentina will be McEwen Copper’s key project, and Rob hopes that an US$80 million financing that’s in the works will fund it part way through a feasibility study.
Finally, I had the chance to hear about uranium from Lobo Tiggre of IndependentSpeculator.com. Lobo always takes a very measured approach to the commodities he covers, and he spoke about a couple of events he believes have been overhyped, including recent physical uranium purchases from companies in the space, as well as the upcoming launch of the Sprott Physical Uranium Trust.
While Lobo doesn’t see those events as immediate game changers, he did emphasize that in the long term he still has a bullish outlook on uranium.
He believes the incentive price for more production to come online is over US$60 per pound at this point, and envisions an eventual future surge after which prices settle at that level or better.
“I think we’re going to see — I don’t know, much higher than the incentive price. Could it go over US$100? Yes, I think so. Could it blow away the previous all-time high? Yes, I think so. Will it stay there? No, I don’t think so” — Lobo Tiggre, IndependentSpeculator.com
The question of course is when, and for now that remains unknown.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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