The Gold Report: The metal mining sector is undergoing many of the same types of issues as the energy sector. What is your candid assessment of the near future for gold, silver and the base metals?
Etienne Moshevich: My outlook for the sector is very similar to that of the overall energy marketthe world needs gold and the commodity isn't going away. It may go out of favor for a couple of years, which we're experiencing now, but it seems as though the market is slowly starting to creep back up and this is the time investors need to be positioning themselves in high-quality management teams and projects before the market gets away from them.
Although many things could change, macro signs are pointing to a turn in the gold market. Even though the U.S. dollar is still the strongest and most reliable currency in the world, more and more countries seem to be shifting away from the dollar, which would definitely strengthen demand for gold. Also, if the U.S. economy falls into another recession and the Federal Reserve decides to apply another one of its quantitative easing techniques, then this will be very bullish for gold.
One last major factor that we should consider is the possible demand from foreign central banks. We need to keep in mind that the Swiss are voting on a gold referendum that would require the Swiss National Bank to hold 20% gold reserves. Even if this doesn't go through, I'm sure there would be more pressure on it to increase gold reserves over time. I'm bullish on silver, as well, over the long term because of its industrial and technological applications.
TGR: Let's tour the field. Starting with gold, which companies do you spot as viable? Continue reading "How to Position Your Portfolio for the Coming Gold Upturn"