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Thursday, March 12, 2015

Very Positive on Gold but Silver the Big Favorite

by Lawrence Williams,

Speaking at the Global Mining Finance conference in London yesterday, Dutch precious metals fund manager, writer, analyst and former TV business pundit, Willem Middelkoop, painted a more positive picture for precious metals, following a perhaps downbeat presentation on the prospects for most metals – base, precious and ferrous, by Investec’s Jeremy Wrathall. Middelkoop, has always in any case tended to be strong on the bullish elements with regard to precious metals – and focuses his Commodity Discovery Fund accordingly. It is largely invested in gold stocks which are at the discovery and development stages. These are the times in a prospective miner’s life which tend to see value growth and consequently the fund has seen a number of stocks it is invested in having been acquisition targets for bigger miners, which has helped it do better than many other precious metals funds and indices in what has been a dismal market for precious metals stocks. While the fund is broad based in terms of the companies in which it invests, around 60% is in discovery stage gold development companies and 24% in silver stocks, with the balance in other metals and minerals and despite the poor performance of precious metals over the past three years the fund has continued to see investor growth.

While Middelkoop is very positive on gold for many of the same reasons as are gold bulls everywhere – 90% of world seeing zero interest rates, the largest bond bubble in history, massive global debt etc. – he does draw strongly on Chinese policy, and statements from various Chinese bankers and officials over the past few years to help make his case given China’s huge relevance to gold supply and demand.

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