After a relatively lackluster summer, investors are hoping gold will have better luck in the fall.
Rob McEwen, chairman and chief owner of McEwen Mining (TSX:
MUX
,NYSE:MUX), is bullish on the yellow metal, but back in July he suggested to the Investing News Network that it
won’t be able to break out
until there’s more widespread acknowledgement that inflation has arrived.
Two months later, is that happening? McEwen said he’s starting to see evidence that it is.
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“I think you’re starting to see (inflation) in many areas,” he said, pointing in particular to food prices. “The world is awash with money right now — governments just opened up their wallets and started printing money in an unprecedented way. So it’s coming — it’s coming quickly.”
McEwen doesn’t think the US Federal Reserve will be able to contain inflation, and encouraged market watchers to look at past inflationary periods to understand why what’s happening today is different.
“It’s a global phenomenon of a scale not seen before in the world,” he explained, emphasizing that inflation is currently not limited to a particular country or group of countries like it was previously.
“(Inflation is) going to overshoot targets and if history’s any gauge they’ll keep printing. They’ll find that as soon as they start tapering everything slows down and there’ll be cries for more money,” he said.
Those and other circumstances make McEwen bullish on gold as well as silver, but he also has an interest in copper. He sees a bright future ahead for the base metal, and was able to share an update on McEwen Copper, a recently introduced vehicle that will house McEwen Mining’s copper assets.
“(McEwen Mining’s) treasury is strong enough to deal with our gold and silver assets, but not strong enough to do the technical work that’s required to develop the Los Azules property,” he said, noting that the asset is one of the world’s largest undeveloped copper properties not held by a major miner.
With a US$80 million financing in progress, half of which McEwen himself has committed to, significant work is planned at Los Azules over the next several years, including an eventual public listing.
For now, McEwen’s advice for investors was to stay in good spirts.
“I believe you’re going to see stronger prices as we move through September and October in the
precious metals
space. The stocks are off a fair bit from their highs and there’s room to catch up, so keep the faith and buy some gold and silver … and maybe some copper too.”
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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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