Do you have wealth insurance? Tocqueville Gold Fund Portfolio Manager John Hathaway has studied the past and he sees a bright future for those who have taken the precaution of protecting themselves from the downside of a general bear market by buying resource mining stocks when they are at historic low prices. In this interview with The Gold Report, Hathaway shares the names the fund is holding as ammunition for a better gold market.
The Gold Report: John, you have studied the fundamentals of gold through history. What is behind the current market prices, and what will it take to move prices higher again?
John Hathaway: Adversity in the financial markets is the trigger that will force the general investment world to become interested in gold again. That is a nice way of saying it will take a bear market to push investors to gold. Monetary policy has forced investors into riskier assets—including junk bonds and overvalued NASDAQ stocks. When the tables turn and people start experiencing losses, there will be finger pointing, starting with the Federal Reserve’s nominal interest rates. That whole spectacle could balloon and cause conventional investors to throw up their hands and run for liquidity.
TGR: We’ve talked to some people, including Brien Lundin, who think that a Federal Reserve interest rate increase will be good for gold because it will remove the question mark that’s been overhanging the gold price since it is pretty much already priced in. Do you agree?
“MAG Silver Corp. is one of the best pure silver stories out there.”
JH: I agree that it has been baked in for years, but I think the bigger story is going to be loss of confidence in the Fed and a general downturn in financial markets, which is long …read more