U.S. Dollar Strength Is Unsustainable - Broadway Gold
(Kitco News)- While allcommodities are suffering under the boot heel of a surging U.S. dollar, onejunior explorer CEO sees the potential for gold and silver to shine as thecurrent environment is unsustainable.
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| Thomas Smeenk, CEO of Broadway Gold Mining |
Monday, theU.S. dollar rose to its highest level in 16 months, while gold fell to aone-month low and is in striking distance of testing psychological support at$1,200 an ounce. December gold futures last traded at $1,203.50 an ounce, down0.42% on the day. Meanwhile the U.S. Dollar Index last traded at 97.51 pointsup 0.63% on the day.
Althoughprecious metals are feeling the brunt of the U.S. dollar strength, base metals,with copper trading near a one-week low, are also feels the pressure.
In aninterview with Kitco News, Thomas Smeenk, CEO of Broadway Gold Mining (TSX.V:BRD), said that the government can continue its game of printing fiat money fora while still but at some point there is going to be a shock to the system andinvestors will turn to commodities as a safe-haven asset.
“Deficitspending at some point is going to drive inflation higher and that will bereflected in commodity prices,” he said. “The strength we have seen in the U.S.dollar isn’t sustainable.”
BroadwayGold continues to explore its Madison copper gold and silver project southernMontana.
Smeenknoted that mining companies continue to struggle in the face of a stronger U.S.dollar and general equities take focus from the mining sector. However, headded valuations in the mining sector are so low that at some point investorsare going to take notice.
“At somepoint, we have to get back to fundamentals,” he said.
AlthoughBroadway gold is a polymetallic project, Smeenk said that he sees copper pricesstruggling in the near-term as global economic worries weigh down demand.However, he added that this is the perfect environment for gold and silver.
He addedthat he also sees silver eventually outperforming gold. The gold-silver ratio isabove 85 points, hitting a new multi-decade high is also unstainable.
“There isa lot of uncertainty in the world and silver and gold should be part ofeveryone’s portfolio,” he said.
By Kitco NewsFor Kitco News
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