In a recent interview, Byron King - editor at Paradigm Press Group - said that even when gold prices are hovering near the record level achieved in January, investors should not think they have missed the opportunity.
He emphasized that structural changes in the economy along with the return of interest in tangible assets are creating strong momentum for the precious metals sector.
Speaking to Kitco on the sidelines of the Prospectors & Developers Association of Canada Convention in Toronto, King said that the number of attendees at this year's event shows that sentiment in the mining industry is clearly improving. Capital flows are returning to this sector as investors are increasingly shifting from financial assets to tangible resources.
King believes that although gold has increased sharply in recent years, the current increase may still be only in the early stages. Investors believe they have missed the increase from about 2,000 USD to 5,000 USD/ounce, so they should focus on the potential ahead instead of looking back at the past.
He said: "Many people think they missed the gold rally, but in fact they only missed the first stage. Don't miss the next step from the $5,000/ounce mark up.
According to King, the fundamental driving force for the increase in precious metals is still concerns about the long-term stability of legal tender and the debt burden of governments.
As US public debt approaches the 39 trillion USD mark, he believes that governments are likely to rely on pumping money and inflation instead of actually paying debt. In that context, holding physical precious metals plays an important tool to preserve asset value.
He said: "If you take your money to buy a gold coin and then put it away, you have preserved its purchasing power.
King also believes that the current increase in precious metals is in a broader trend: the shift to a multipolar global economic order and increasing competition for resources.
He explained that decades of economic financialization and lack of investment in the mining industry have made the global supply chain fragile, while increasing geopolitical tensions and growing industrial demand are highlighting the need to develop new resources.
Government spending on strategic minerals is also driving market interest. King said tens of billions of USD are being poured into mining projects related to strategic materials such as copper, rare earths, tungsten and antimony.
He emphasized: "The world is returning to tangible assets. Real things will win over financial papers.
He said the current environment is a "market for good stock pickers" in the entire industry, from early exploration companies to large manufacturers.
The growth runway of the mining industry is still very wide," he said.
King also expects major gold producers to increasingly attract the attention of general investors as higher gold prices help improve cash flow and increase dividends.
According to him, mining companies with stable operations and disciplined governance can gradually become income-generating assets, similar to bank stocks or traditional energy.
He concluded: "If something happens to the financial system, then companies that control real assets - mines and metals underground will have enormous value.
