Gold bars? ETFs? Junior miners? Royalty streams? Majors with dividends? How is an investor to determine the best way to leverage the upside of a beaten up metals market? The Gold Report hosted a standing-room-only fund manager panel at the Silver Summit in San Francisco featuring insights from three very different points of view. Axel Merk, president and CIO of Merk Investments, focuses on gold and currency investing. Robert Mullin is co-founder of Real Assets Equity Income Funds and focuses largely on producing mining companies. Greg Orrell is the president and portfolio manager of the OCM Gold Fund and invests across all sectors of the precious metals industry, including junior producers and exploration and development companies. All three see unique opportunities right now for creating a portfolio that captures a renewed focus from mining executives on shareholder interests.
The Gold Report: Do headlines or fundamentals drive metals and commodity prices?
Greg Orrell: It depends on where you are in the cycle. Right now, capital flows aren’t coming into the sector, especially in the futures or paper market for gold, which tends to set the price. Everyone is worried about the headline fear of the dollar being an overweighting factor or a bump in interest rates negatively impacting gold prices. Investors are reacting to the headlines by staying away or pulling money out of gold assets, disregarding strong fundamentals.
Axel Merk: We have seen in our gold ETF that while it has been growing quite steadily, it is doing so at a much lower level. Right now, most of the folks who wanted to sell have sold. A lot of people are on the sidelines, especially ahead of the Federal Reserve rate hike. If we get this rate hike out of the way, those people will stop waiting and come back into the …read more