Tavi Costa, partner and portfolio manager at Crescat Capital, shared his thoughts on gold's recent price activity, outlining why he thinks the yellow metal will lead other commodities higher.
He told the Investing News Network that silver and copper are set to benefit from its rise.
"To me gold is sort of the first thing to really move, and the first box to check in terms of a secular market. But where you're really going to likely get those big returns is going to be on things that tend to move with gold. And as we see gold move, usually you tend to see other metals really leading the way to the upside," Costa explained.
He also addressed the disconnect between the gold price and gold stocks. While some companies have seen gains, many haven't performed as well as investors would hope in today's environment of high prices.
"I think that the mining industry is so close to one of those big moves up that we tend to see in the industry — 300, 400 percent moves in the short term," Costa said, pointing to capitulation among frustrated investors.
The loss of faith reminds him of the 1970s, when there was a perception that the sector would never come back. "Unless I'm wrong and it's different this time, the industry always comes back," he said. "I'm a believer of that."
Costa sees opportunities to jump in, and expects the mining industry to "massively outperform" the gold price.
"Usually the conventional wisdom is wrong, and I've never seen an industry that is more hated than the gold space," he said during the conversation. "I don't know of a single industry that is more hated than the gold miners ... they are the most hated industry in the whole market, and I think that's a huge opportunity."
In closing, Costa encouraged investors to get their portfolios positioned before companies take off. "It's time to get busy and not be concerned about why are miners not moving vs. gold," he said.
Watch the interview above for more of his thoughts on gold and the resource sector.
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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.