(Kitco News) - With spiking inflation and the Russia-Ukraine war, gold should have performed better this year, said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.
Kitco Mining correspondent Paul Harris spoke to Ecclestone at Mines and Money London held from November 29 to December 1.
In 2022 Ecclestone said a confluence of events should have helped the precious metal sector. Year-to-date the VanEck Gold Miners ETF (NYSEARCA: GDX) is down 8%.
"Inflation is romping at a level that has not been seen since the 1970s, and we also have international instability with even the threat of nukes being thrown around," said Ecclestone. "These are the type of issues that traditionally lit a fire under precious metals—issues that we haven't seen for decades and yet...[shrugs]"
Ecclestone said cryptocurrency partly spoiled the party for precious metals. Maybe there will be a turn. With the recent turmoil in the space, Ecclestone said investors now understand cryptocurrencies are speculative.
"It's been a wake-up moment for a few people, but there's still so many card-carrying fans out there who do not realize the vulnerability of that space," said Ecclestone.
The miners are setting up for a run, said Ecclestone. Resource investors just have to stick it out.
"Hang in there—definitely for precious metals," said Ecclestone. "Base metals are not as good as they've been in the last two years, but they're definitely way better than they were over the last 10 years."
Coverage of Mines and Money London sponsored by Discovery Group.
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