Analyst: It’s a Good Time to Buy Silver and Gold

silver coinIn a recent interview, precious metals expert Eric Sprott detailed his thoughts on where silver could be headed for the next several weeks.

Spott noted that “we could get a bit of a run here for a couple of weeks if we get options expiration out of the way,” referencing the recent pattern of metals rallying following options expiration on the third Saturday of each month.

He’s also examined the financial statements of many of the major mining companies. He was stunned to see the ultra low returns on capital of many of the miners, and said he doesn’t like to invest in them for many reasons, including bad debt-to-equity ratios, fallout from bad hedges, and more.

Instead, Sprott prefers investing in physical metals and ETFs like GLD and SLV. Still, “it’s hard to be comfortable” because of the erratic price action. Still, “The price of silver has done very well — imagine if we could have a 10% month every month for the price of silver?”

He also loves metals as a hedge against stocks and a worsening economy. Referencing the recent weak GDP report, Spott quipped that “How can you expect earnings to go up with GDP [rising at only] 1.2%?”

The iShares Silver Trust (ETF) (NYSE:SLV) rose $0.09 (+0.47%) to $19.44 per share in Monday morning trading. The SLV has gained 47% year-to-date, hitting fresh two-year highs this morning.

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You can listen to Sprott’s entire interview here.

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