I had the chance to reconnect this afternoon with a NYC metals and mining equity fund manager, whose total firm assets exceed $10 billion. While he can’t be referenced at this time, it was a fascinating conversation worth sharing.
What stood out most was his belief that this week’s frightening collapse in gold may have provided the cover for, “excessive stimulus coming out of the U.S., Japan, other parts of Asia, and the U.K.,” with the beneficiaries of the take-down, being the central banks themselves—through both increased monetization and increased gold buying.
When asked what the week was like from a fund perspective, he indicated that, “It was a good week. We had a downturn in the market, but I think we’re in a more positive environment going forward. Things have not changed with regard to developments in the global economy that support gold prices, other than the fact that gold prices came down.”
In terms of adding positions, whether it be in metals or mining shares, he stated that, “We tell our clients to be ‘average-costers’—and that’s what we try to do. We don’t buy all at once, sometimes we buy more when the opportunity is there, but I think dollar cost averaging is one of the best strategies there is.” ...