SAN FRANCISCO, CA–(Marketwired – January 06, 2016) – In a market that is not rewarding companies for pulling resources out of the ground, Sprott US Holdings Inc. CEO Rick Rule would prefer to see what he calls “optionality” rather than dilution from companies looking to justify salaries. In this interview with The Gold Report, he praises innovative precious metals streams on base metal projects and one Canadian company that is adding value and being rewarded for it.
TGR: Now that the Federal Reserve has increased the key interest rate slightly, the expectation is that the value of the dollar will increase relative to other currencies. How could that be the sign of a bottom for gold?
RR: I cut my teeth in the gold business in the 1970s when the prime interest rate in the U.S. increased from 4% to 15%, and the gold price went from $35/ounce ($35/oz) to $850/oz. I also remember that the gold price increased in 2002 in a climate of increasing U.S. interest rates.
The question is more about the reason that interest rates get raised than it is about the simple fact that interest rates go up. If interest rates go up because there is an anticipation of the deterioration in the price of the dollar and, as a consequence, savers deserve more compensation for lending credit, that sort of ethos is supportive to the gold price. If, by contrast, Janet Yellen can make not just the first 25 basis point interest rate rise succeed but subsequent interest rates rise, too, in other words if she can get a positive real interest rate on the U.S. 10-year treasury that exceeds the depreciation in the purchasing power of the currency, then…
Continue reading this interview: Veteran Investor Rick Rule Reveals a Unique Arbitrage Opportunity
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Investors rely on The Gold Report to share investment ideas for the precious, base and critical metals sector. Our exclusive interviews with leading industry experts and analysts provide a clear picture of the causes of macro-economic shifts and the strategies that help you capitalize on developing trends.
Fission Uranium Corp. is a sponsor of Streetwise Reports. Rick Rule had final approval of the content of the interview and is wholly responsible for the validity of the statements. Opinions expressed are the opinions of Mr. Rule and not of The Gold Report or its officers. The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.