Peter Schiff on the Ultimate Gold Panel

During the Vancouver Resource Investment Conference, Peter Schiff joined Frank Holmes (US Global), Rick Rule (Sprott US), and Grant Williams (Vulpes Investment Management) on the “Ultimate Gold Panel. Daniela Cambone moderated the discussion.

Gold charted its best year since 2010 last year. The price increased by 18.4% in dollar terms. The yellow metal also reached record highs in every G10 currency except the dollar and the Swiss franc. Can this bull-run can continue into 2020?

Peter noted that he was on a gold panel the year before and he was the only person who thought gold was going to go up. Many were predicting the yellow metal would fall back to $1,000.

I thought that was very improbable. And now you’re throwing around could it go back down to $1,300. Look, it’s possible, but I think it’s highly improbable that that’s going to happen. If gold is broken out and 1,350 was a six-year high that capped every rally, I think we took it out, we’ve never looked back ever since. We now seem to be building support around 1,550, or just under 1,550, which was the high before we had a pullback to around what? 1,450. So, the market looks very strong to me. So, while it’s possible that we could get that large decline, I wouldn’t want to hope for it or bet on it. I think that there’s a lot more upside potential and I think the number that Dalio is talking about, 2,000, not only is that very probable, but depending on the outcome of this election, we could go much higher. I mean, if Bernie Sanders were to be elected president, just imagine what would happen to the price of gold. The very night the results came in.”

Cambone asked Peter how much he thought gold holding above 1,550 has to do with the underreported repo crisis and all of the liquidity being injected into the economy by the Federal Reserve.

It’s all a function of the Fed. And in fact, I think what people should take away from this recent geopolitical tension in Iran — what rallied? Because the dollar didn’t. US Treasuries really didn’t. I mean, you had a little bit of a rally in the yen and the Swiss franc. But the main rally was in gold. And that shows you that the world prefers gold to dollars.”

The panel also discussed the surging stock market. Peter pointed out that all bubbles pop.

It’s not like this bubble is any different. It’s going to pop and the thing is when it does, very few people who are in it are going to realize it. Because when you don’t know it’s a bubble, you don’t see the pin.”

Peter said the only rational thing to do is not participate and to position yourself for when the music stops.

The Perth Mint in Australia saw record sales last year, but the US Mint had a horrible 2019. What are North American investors missing? Peter said there were two factors. In the first place, gold hit new highs in virtually every currency except the dollar. That makes the bull market more apparent to people in other countries. Second, the biggest gold buyers in the US are Republicans. They were worried when Obama was president, but they’re optimistic with Trump in the White House.

So, they’re buying the stock market instead of gold … Americans don’t see the bull market and they’re wildly optimistic when they should be extremely cautious. Americans should be selling US stocks and buying gold.”

And how much gold should you have in your portfolio?

Peter said 10% is a good start and you can have more depending on where we are in the cycle.

I look at gold as liquidity, as a store of value, as an alternative to lower quality stores of value like the dollar or the euro or the yen. So, if you want to have dry powder, keep it in gold.”

The panel weighed in on the presidential election and what that could mean for the markets, gold mining stocks and bitcoin.