Last week Grummes spoke to Kitco Mining at Deutsche Goldmesse at Frankfurt.
Earlier this month gold prices jumped 1% following weaker-than-expected inflation numbers. The U.S. Labor Department said its much-anticipated Consumer Price Index rose 0.4% last month after a 0.4% rise in September. Economists were looking for an increase of 0.6%. The broader market rallied, too, with the S&P 500 jumping 5%, its biggest rally in two years.
With the good inflation numbers, the U.S. dollar should has weakened, favoring gold.
Grummes said some other factors supporting gold are central banks purchases and the general market “kicking in.”
“I don’t see a lot of downsides,” said Grummes.
While gold has moved, Grummes noted that silver lags.
“Silver always comes later in a precious metals bull market, so the really nice time for silver usually comes in the last quarter of a bull market, so I assume it will take a little bit more time until you see a rally,” said Grummes.
Kitco Mining’s coverage of Deutsche Goldmesse was sponsored by Faraday Copper.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.