Gold price hits another record high, when should investors take profits?

NEW YORK (February 21) Gold prices hit another record high Thursday, however Christopher Ecclestone, Principal and Mining Strategist at Hallgarten & Company, suggests investors should consider taking profits.

In a recent interview on Kitco Mining's 'Digging Deep with Paul Harris,' Ecclestone pointed out that gold seems to have "bumped into a bit of a ceiling at the moment."

Ecclestone questions the factors driving gold's rise: "Gold supposedly reacts to international tensions, but we don't have any more international tensions than we had a month ago or two months ago."

He also dismisses the notion that tariffs are a significant factor, stating, "Trump is not trying to get the gold price up. I don't think that that's one of his boxes."

Ecclestone warns that the current surge may be temporary, saying, "if the motors behind this gold uplift go away, then gold could find itself in a bit of a Wile E. Coyote moment, where you look down and you see a $500, $300 gap under gold."

Gold mining dividends under scrutiny

Ecclestone criticizes gold companies for their stingy dividend policies, particularly the Canadian ones. He argues that these companies should be "distributing as much of the profits as you can" to protect themselves from profit-takers.

According to Ecclestone, if a project isn't viable enough to borrow money for at a reasonable rate, "then the project probably isn't worth it."

Copper breaks free from 'energy transition myth'

Copper is "breaking free from the energy transition myth," Ecclestone noted. He emphasizes that copper's dynamics are driven by "lack of supply, lack of pipeline" rather than the "fantasy of an EV in everyone's driveway".

While Freeport-McMoRan is investing in junior copper explorers, Ecclestone views these investments as "puny." He suggests they should instead be investing in "big things" in "Peru and Argentina, even Chile".

Tungsten and antimony gain attention

Ecclestone highlighted the growing interest in critical metals like tungsten and antimony. He notes that China's restrictions on tungsten exports and its "dual use" definition have contributed to this attention.

According to Ecclestone, "Tungsten is the premier military metal. It's absolutely vital for a modern military".

Regarding antimony, while some talk about high prices, Ecclestone anticipates a price correction, saying, "I see the Chinese coming along with their big mallet, as they've done in the lithium space and the rarer space, and clocking antimony on the head and it will be a severe shock."

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