Rick Rule, proprietor at Rule Investment Media, shared his latest thoughts on gold, silver and uranium dynamics, as well as the opportunity he sees in the "hated" platinum and palladium sectors.
Speaking first about gold, he said so far foreign central banks have been its main buyers. In his experience, retail investors only become interested in the metal when they get concerned about maintaining their purchasing power.
At this point, that hasn't happened yet, and it may not happen for some time.
"I will note that it took five years for this to happen in the 1967, 1972 timeframe. In other words, while people understood that inflation was taking place, the perniciousness of it, the impact on their own personal lifestyle, wasn't apparent for five years. And my suspicion is that we're facing a delayed punch with regard to taxpayers and savers understanding the impact of inflation on their own purse," Rule explained during the conversation.
"As they come to understand that, I think that you will get a layer of retail buying, the traditional retail buyer, on top of the central bank buyer. And if I'm right with regards to that, then you could see some real fireworks in the gold price."
When asked what's moving the silver price right now, Rule said he doesn't know. Typically the white metal follows gold and then outperforms, but he would have expected silver to need a bigger move in gold to take off.
An anomaly was 2021's silver squeeze, which was driven by the Reddit (NYSE:RDDT) community. At that time, the normal sequence — where the metal moves and then is followed by miners, developers and juniors — was turned on its head.
"It might be that your generation doesn't do things the way my generation does. I'll need to observe that," he said.
Looking briefly at uranium, Rule said the price is taking an important breather. In his view, a key trend to watch right now is the rising prominence of the term market, which will help lower the cost of capital in the sector.
"The real pricing structure is being determined in the term market, and increasingly it's going to be reflected in the term market in the five year product, the 10 year product, the 15 year product and the 20 year product. This is going to have really profound and positive implications for those few uranium juniors that have developable projects," he said.
Watch the interview for more from Rule on the topics mentioned above.
You can also click here for information about the upcoming Rule Symposium, which runs from July 7 to 11 in Boca Raton, Florida. A livestream will also be available, with content available until December 31 of this year.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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