Video News/In Focus with Jeremy Szafron

(Kitco News) - The market is mispricing Federal Reserve policy by betting on a campaign of rate hikes the government cannot afford, and that misjudgment is a buying opportunity for gold, according to Brien Lundin, editor of Gold Newsletter and host of the New Orleans Investment Conference. Speaking with Kitco News, Lundin said that while he regards Fed Chair Kevin Warsh as "probably the best Federal Reserve chairman" in his experience, "if he really thinks he can conduct a campaign of rate hikes, then he hasn't done the math." With federal debt so large, he argued, even minor rate increases carry an outsized cost, noting the US already spends more servicing its debt than on national defense. Lundin said gold falls whenever Warsh sounds hawkish, only for buyers to step back in and restore the uptrend. On the mining sector, he said $4,400 gold has revived deposits that were once uneconomic but warned that high prices can conceal weak projects and dilution, and that the one thing no price can fix is poor management. He also said central bank buying has shifted from driving the market to acting as "a support below the market."