John Kaiser: Gold Still Due for Repricing; What Will Kickstart Junior Miners
The gold price was on the rise in after-hours trading on Wednesday (February 23), leaping rapidly to just above US$1,940 per ounce as conflict between Russia and Ukraine intensified.
Speaking last Friday (February 18), when the yellow metal was trading between about US$1,890 and US$1,895, John Kaiser of Kaiser Research said the conflict between the two countries is key for gold.
“The biggest driver is now what’s still happening with Russia,” he said, pointing to high inflation and waning interest in bitcoin as other supportive elements for the yellow metal.
Kaiser has been calling for a repricing of gold for some time, and although 2021 didn’t bring the performance many had hoped for, he thinks the turbulence ahead will eventually push gold to the US$2,000 to US$3,000 range.
He also sees a bright future for junior miners, particularly those associated with the clean energy transition. He noted that this shift, coupled with potential global supply disruptions, is creating strong opportunities.
“All of a sudden we have a supply shock created by geopolitical conflict, layered on top of expected demand growth,” Kaiser said. “Short of a colossal global depression, base metals prices are going to go even higher.”
As it becomes clear that more mines are needed, he anticipates that countries will start looking for key commodities in their own backyards, potentially rethinking previously ignored systems to show their feasibility.
“It does not take much money to inject a lot of life into the resource juniors,” said Kaiser. “Once this transition happens and (people) realize we need to develop more supply — the world’s not coming to an end, COVID is now in the rearview mirror and not coming at us like some sort of train — that’s going to really kickstart this sector.”
Watch the interview above for more from Kaiser on gold and the junior mining sector.
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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.