Volatility is back in a big way, warned Kitco’s Peter Hug.
Hug, the head of the precious metal divsion at Kitco, joined special correspondent Paul Harris; editor Neils Christensen; and mining audiences manager, Michael McCrae, to record a podcast on Friday.
With the presidential election weeks away and government stimulus measures stalled, Hug believes volatile markets will be the rule right through the election and until the end of the year.
“You know, from a macro perspective, you have to be bullish the metals, but if you’re a trader–from a timing perspective–you can get absolutely creamed in this market,” said Hug. “I was warning [be] extremely cautious about trying to trade this market with this volatility.”
Hug said both the Republicans and Democrats will be engaged in partisanship that will drag the economy down, especially since the new Supreme Court pick has poisoned cooperation, thus stalling hopes for another stimulus while COVID-19 still thrashes the economy.
“The administration can’t move because the Democrats aren’t going to allow them to move. [The Democrats] want the most damage, in my opinion, prior to this election. They don’t want to give Trump any more ammunition to get elected, so they are going to stall this stimulus package.”
Later in the podcast, Paul Harris discussed headwinds for juniors. Majors are putting off mergers and acquisitions and focusing on growing their asset base and brownfield development rather than greenfield.
Michael McCrae reviewed Tesla’s Battery Day where, remarkably, the deeply technical field of mineral processing held everybody in thrall when Elon Musk announced plans for more efficient nickel and lithium production from mines.