Precious metals rally on supply deficits: Sprott’s ETF director Schoffstall

? (Anchor) 00:00.070

looking at gold so gold 's on pace for its best year since the seventies the years that you gave us seventy three seventy nine those are the years after we abandoned the gold standard so is there any correlation between those years and this year that we're seeing such a big goal

? (Anchor) 00:13.430

rally

Steve Schoffstall (Director of ETF Product Management) 00:14.910

yeah you know if you go back through the seventies till now there's only been four times that gold 's actually returned over fifty percent so i think a lot of what we're seeing now is the debasement trade so looking at largely central banks moving out of dollar assets and

Steve Schoffstall (Director of ETF Product Management) 00:28.430

they're moving into gold it allows them to not only hedge against you know what we might be doing economically but also protect against trade wars and other geopolitical uncertainty that's going on in the market right now investors are just now starting to catch up to the gold

Steve Schoffstall (Director of ETF Product Management) 00:44.080

trade and we're really starting now to see flows and are into physical gold whereas gold miners are actually seeing a little bit different story yeah you say

? (Anchor) 00:51.070

when it comes to the gold miners they actually have a very good dividend that's a part of the action there i want to go back to the actual metal itself we often talk about the idea that it's people hedging away from the dollar central bank buying specifically china are there any

? (Anchor) 01:02.430

other catalyst for gold in twenty twenty six that can move it even higher after more than fifty record highs this year

Steve Schoffstall (Director of ETF Product Management) 01:08.430

yeah i think when you look out through twenty twenty six i guess the main question to ask is the conditions that we were seeing in twenty twenty five are we likely to see a lot of those in twenty twenty six so threats of declining interest rates geopolitical uncertainty and just

Steve Schoffstall (Director of ETF Product Management) 01:23.550

overall geopolitical tensions i think those are key drivers that are going to continue to persist out through twenty twenty six and we see a lot of calls for gold to move higher and you know when we don't see you know a large investor participation it hasn't been recently that

Steve Schoffstall (Director of ETF Product Management) 01:39.110

we've actually started to see western investors move into the trade i think there's still some room to run there for physical gold

? (Anchor) 01:44.510

alright so what the moves in silver you say silver has been in a deficit for the last six years so why are we just seeing this big rally recently

Steve Schoffstall (Director of ETF Product Management) 01:51.070

you know silver 's always kind of been viewed as the little brother to gold it's tends to rally after gold makes its move and we're into that second phase now of this precious metals bull market the other aspect of that is it's really not just a precious metal it's also becoming

Steve Schoffstall (Director of ETF Product Management) 02:07.320

increasingly an industrial metal and there's this new shift in the way that silver is being viewed those industrial applications are really increasing over the last several years here and investors are just now you know starting to see the silver trade i think some of that is

Steve Schoffstall (Director of ETF Product Management) 02:22.470

because gold has performed so well that investors have been content with gold and gold miners but now they're starting to move into silver allocation as well all right

? (Anchor) 02:30.270

you say the miners they offer more leverage than holding the physical commodity but when you invest in the miners you're also taking on their execution risk their ability to to run their business correctly to sell and do other things you say it's leverage but as an investor if

? (Anchor) 02:45.030

if like myself like a retail investor why would i want to hold the miners over the commodity when you're you're very bullish on the commodity itself so why take on that risk of the actual company

Steve Schoffstall (Director of ETF Product Management) 02:53.870

yeah we see you know investors really look at you know gold and silver in two separate ways we have some investors that just like the physical component than there are there are other investors that like to take on that risk that comes with with silver when you look at the

Steve Schoffstall (Director of ETF Product Management) 03:07.430

leverage that you can get for silver miners if you look at the all in sustaining cost of silver it's it's actually below fifteen dollars an ounce for many of these miners the difference with silver miners versus miners of maybe other metals is that most silver 's mined as a

Steve Schoffstall (Director of ETF Product Management) 03:20.990

byproduct so really looking in and focusing on play miners is an area where we're starting to see investors really start to take an active approach in understanding what's in their ETF or in their fund holdings all right

? (Anchor) 03:33.350

one last thing i want to talk to you about copper up about thirty five thirty seven percent so far this year underperforming the other two but still a really strong year for copper is that still levered to the housing market if we continue to see mortgage rates go down and

? (Anchor) 03:44.910

people willing to sell their houses or move to a different house is that another potential tailwind for the copper market or is that already priced in

Steve Schoffstall (Director of ETF Product Management) 03:52.830

some of that's probably pricing the copper market has evolved over the last four or five years where it used to be you know very much tied to global economic health we're starting to see copper really move out of that and it's becoming an asset that's that's got a much more

Steve Schoffstall (Director of ETF Product Management) 04:06.510

momentum behind it we see things like the energy transition where there's been almost two trillion dollars of investment just last year alone that provides us undercurrent of support that we didn't see you know five or ten years ago you know the increased electrification

Steve Schoffstall (Director of ETF Product Management) 04:19.400

artificial intelligence and the build out in data centers that we see there all things that are adding to the demand for copper at the same time supply is constrained we're not seeing new mines come online in any significant fashions and we're actually starting to see several

Steve Schoffstall (Director of ETF Product Management) 04:33.790

key disruptions across the copper industry likely to push copper to a deficit this year and if we're looking longer term into the medium and longer term expect to see copper in a prolonged deficit as well