* Hedge fund boss says more dollars flows favor silver
* Wary of investing in base metal due to uncertain economy
TORONTO, March 8 (Reuters) – Silver is likely to keep outperforming gold thanks to strong dollar flows, though both are still good investments compared with copper and other base metals, according to Eric Sprott, the hedge-fund manager and Canadian investment guru.
“I watch where the money goes and the money’s going into silver. There’s as much money going into silver as into gold in dollar terms,” said Sprott in an interview with Reuters.
Sprott, who heads Toronto-based hedge-fund Sprott Asset Management, said it is important to note that silver available to buy is relatively scarce in terms of value, and that bodes well for further gains.
“There is 75 times more dollars worth of gold to buy than silver, but the money’s going in one to one,” says Sprott, while speaking on the sidelines of an investor event held in conjunction with the annual PDAC mining convention in Toronto.
Silver stocks in COMEX warehouses are near their lowest since April 2006, when the metal traded at $5 an ounce. Demand for silver coins has also picked up, especially in the United States, where it was at record levels early this year.
“My biggest thing is silver — I think silver is going to go up a lot here. Gold’s right in there, but not as good as silver,” said Sprott, following a presentation to hundreds of investors in a resplendent ballroom at Toronto’s Royal York Hotel.
Gold and silver — traditionally viewed as a safe store of value in turbulent times — have soared on inflation concerns, political turmoil in the Middle East and North Africa, an uneven U.S. economic recovery and the European sovereign debt crisis.
Gold touched an all-time high of $1,444.40 on Monday, while silver hit a 31-year high of $36.70 an ounce, after rating agency Moody’s downgraded Greece’s debt and violence flared anew in Libya.
“I have a little website that sells gold and silver maple leafs, and we sell about four times more silver than gold in dollars (terms),” said Sprott, who had earlier in the day addressed a room full of miners and investors and others at the PDAC convention.
The PDAC event is the world’s largest gathering of people tied to the mining industry, and this year’s event is expected to attract more than 22,000. The mood among delegates is exuberant, thanks to record or near-record prices that both precious and base metals are commanding.
BASE METALS RISKY
While bullish on precious metals, Sprott is wary of base metals – copper, nickel and zinc – as their fortunes are too closely tied to the fate of the broader economy.
“I agree with the prices of precious metals. I’m not as much of a bull on base metals,” said Sprott. “I still worry about the financial system, it’s massively over-levered and will still come undone.”
Sprott’s views on base metals mirror those of another of Canada’s most influential money managers, Donald Coxe, who expresses similar doubts about the strength of the economy due to surging food and fuel prices.
“I’m not as economically optimistic as the average guy, so I don’t go to base metals,” said Sprott, a gold bug, who has built a reputation for bucking market trends.
“We have oil and food prices rising like crazy … It’s almost hyper-inflationary,” said Sprott, who advises investors to put money in “real things” where demand is virtually inelastic.
“I’m very optimistic about gold and silver,” said Sprott. “And real things like potash, uranium, oil, stuff that is absolutely essential.”
(Editing by Frank McGurty)
Tue Mar 8, 2011 10:59am EST
By Euan Rocha and Pav Jordan
Only physical gold and silver are real, everything else is an illusion.
– Exposed: The iShares Silver Trust (SLV) Scam
More on gold and silver:
– The Constraints on Silver Supply: Bob Quartermain
– No Silver? No Problem: US Mint Would Like To Know If You Will Accept Brass, Steel, Iron Or Tungsten Coins Instead
– Physical Silver (PSLV) Premium To NAV Surges To Record High
– JP Morgan And HSBC Silver Manipulation Explained In The New York Times!
– Louise Yamada: $80 Silver, $2,000 Gold and $140 Oil
– Silver Shorts Bloodbath!
– John Hathaway: $50 to $60 Silver, US Dollar in Danger
– Why Silver Is Headed To $500 Per Oz – Backwardation Explained
– Silver Touches Fresh 31 Year High of $34.90, US Mint Runs Out Of Bullion Blanks, Halts American Eagle Silver Coin Production
– CNBC: Total Silver Demand At 127% ! – The Case For $130 Silver
– Dollar Ready to Collapse, Silver Squeeze to Continue
– Even The Royal Canadian Mint Now Says It’s Difficult To Secure Silver
– Unprecedented: Silver Backwardation Surges To Over $1.00
– Eric Sprott on Silver: ‘THERE IS NOTHING LEFT’
– Fractal Analysis Suggests Silver to Reach $52 – $56 by May – June 2011
– Short Squeeze in Silver, Manipulators Getting Overrun
– Silver Takes Out Hunt Brothers High … When Priced In Euros
– Silver Backwardation Now ‘Unprecedented 73 Cents’
– Short Squeeze Takes Silver To Fresh 31 Year High
– Silver: Short Squeeze Could Be the Big One – Reaches New Multi-Decade High – Still In Backwardation
– Massive Short Squeeze in Silver, Gold to Hit New Highs
– London Source: Asians Buying SLV to Take Delivery of Silver
– COMEX Silver Inventories Drop To 4 Year Low. COMEX Default Or Hunt Brothers Redux?
– This Past Week in Gold and Silver
– ‘US Silver Term Structure Inverts As Supply Tightens’ – Reuters Article On Silver Backwardation
– JP Morgan Silver Manipulation Explained (Part 1-4)
– Silver Bullion Backwardation Suggests Supply Stress
– Silver Lease Rates Rise Sharply – Bond Yields in Portugal Rise to Record
– Silver Is Already In Extreme Backwardation! If The Same Happens With Gold, Then The End Game For The US Dollar With Hyperinflation Is Near
– Perth Mint Has Run Out of 100 Ounce SILVER Bars for at least 6 Weeks!!!
– Silver Breaks Its Golden Shackles And More Signs of Silver Shortages
– $6,000 Silver and the ONE BANK
– Canada’s Biggest Bullion Bank Scotia Mocatta: ALL SILVER BARS SOLD OUT
– US Mint Sells Absolute Record 6.4 Million Ounces Of Silver In January, 50% More Than Previous Highest Month
– Eric Sprott: Expect $50 Silver, Gold Possibly $2,150 by Spring
– US Mint Reports Unprecedented Buying Spree Of Physical Silver
– BullionVault.com Runs Out Of Silver In Germany
– Silver: Shortage This Decade, Will Be Worth More Than Gold (!!!)
– Silver Derivatives – China and JP Morgan
– Max Keiser: Want JP Morgan to Crash? Buy Silver!
– Max Keiser: Crash JP Morgan – Buy Silver!
– JPMorgan Silver Manipulation Explained (Must-See!)
– The Driver For Gold (Almost) Nobody Is Watching
– Forget $8,000, Gold Headed Much Higher, Dow To Lose 90% Vs Gold
– Pay Taxes In Gold? Obama Golf, We Buy Gold!
– Chief Investment Strategist John Embry: Gold to $1,650, Shorts to Get Crushed
– Gold Buying in China Jumps as Inflation Flares, Boosting Demand: UBS
– Gold Coiled – By June, the US Will Have Monetized 100% of All of The Debt Issuance – Hyperinflation May Be in the Cards
– Probable Black Swan Event Equals Gold Explosion
– Richard Russell: Possibility of Gold Breaking to New Highs
– Brazilian Billionaire Eike Batista Reaffirms $1 Billion Bid for Ventana Gold
– Americans Will Flock Into $5,000 Gold and $500 Silver
– Chinese Have A New Method To Buy Massive Amounts Of Physical Gold, Bypassing Comex And Any Form Of Delivery Limits And Problems
– Gold This Decade!!!
– ‘GoldNomics’: Cash or Gold Bullion?
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– China, Russia, Iran are Dumping the Dollar, Buy Gold And Silver
– Gold and Gold Mining Shares As a Percentage of Global Assets or ‘The Once In a Lifetime Ride’
And don’t forget to do this (!!!)…
– James G. Rickards of Omnis Inc.: Get Your Gold Out Of The Banking System
… or …
– US DEPARTMENT OF HOMELAND SECURITY HAS TOLD BANKS – IN WRITING – IT MAY INSPECT SAFE DEPOSIT BOXES WITHOUT WARRANT AND SIEZE ANY GOLD, SILVER, GUNS OR OTHER VALUABLES IT FINDS INSIDE THOSE BOXES!
– Egon von Greyerz of Matterhorn Asset Management: ‘A Hyperinflationary Deluge Is Imminent’, And Why, Therefore, Bernanke’s Motto Is ‘Après Nous Le Déluge’
– The Dollar Collapse Will Shock the World
– Marc Faber: ‘I Think We Are All Doomed’
– The Market Is Telling Us That The US Dollar Is Finished
– Global Economy? 23 Facts Which Prove That Globalism Is Pushing The Standard Of Living Of The Middle Class Down To Third World Levels
– IS THERE GOLD IN FORT KNOX?
– Tungsten Outperforms Gold, Returns 70 Percent In Last Year (And we all know exactly why!)
– Alert: Get Out of Your Dollar Assets Now!!!
– The Ultimate Cost of 0% Money
– These Central Banks Are Printing Money – Prepare Yourself
– Quantitative Easing Explained