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‘This is the most unloved gold bull market I’ve ever seen’ – Peter Schiff

Gold and silver continue to break record highs amid the coronavirus-driven global economic turmoil. However, there still seems to be a lot of skepticism about precious metals, says veteran stockbroker Peter Schiff.

In a new episode of his podcast, the economist noted that even with Friday’s corrective sell-off, where gold was down about $40 at one point and silver fell back below $28 for a time, bullion still closed well above $2,000 and was up three percent on the week. Silver ended up closing above $28 and saw a 15.5 percent weekly gain. Gold has closed higher for nine consecutive weeks.

“I’ve been talking about this phenomenon on this podcast the entire time — that gold stocks have not really confirmed the bull market even though the bull market is taking place anyway, we haven’t seen it in gold stocks,” Schiff said.

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“A lot of the reasons people were kind of diminishing the significance of the gold bull market was they said, ‘Hey, it’s not being confirmed by silver. Gold is going up but silver is going nowhere, and you can’t have a bull market in gold unless you have a bull market in silver.’ Well, OK. Now we have a bull market in silver. We’ve had a significant breakout in the price of silver. But still, people don’t believe this bull market. I mean, this is probably the most unloved gold bull market I’ve ever seen in my career.”

According to Schiff, the fundamentals are better than any he’s ever seen. He explained that the US Federal Reserve is printing trillions of dollars, with its chairman Jerome Powell indicating there are no plans to raise interest rates. There are also reports that the central bank is set to make a commitment to ramping up inflation. “All of this is extremely bullish for gold,” Schiff says.

He also pointed out that there’s a difference between the buyers of gold and those who buy gold stocks. The buyers for gold and silver are real buyers, individual investors, and, in the case of gold, central banks.

“The buyers of physical metal are buying as an alternative to fiat money. … They are voting with their feet. They are running away from their fiat currencies, and they are running towards a real monetary alternative in gold and silver.”

On the other hand, buyers of gold stocks tend to be stock buyers and speculators, Schiff said, adding that he thinks the investment community doesn’t believe the gold rally is going to last. “They don’t believe gold mining companies are really going to benefit from a temporary rise in gold… A lot of people seem to think the rally in gold is simply a function of COVID-19.”

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