Gold will reach new highs in 2023, but the stock market will suffer for years – Peter Grandich

(Kitco News) – Peter Grandich, who correctly predicted the market crash for both cryptocurrencies and stocks in 2022, just shared his forecast for 2023 with Kitco News. The veteran investor said that while he sees weakness in most markets for the foreseeable future, there are still undervalued assets that he expects to outperform.

Grandich told Kitco News anchor David Lin that as far as the stock market is concerned, he sees a bear market that will last for many years. “I’d go so far as to say I don’t think we’re going to reach a new level in my life right now,” Grandic said. “I really think it’s going to be very difficult for several years for the stock market to make double-digit gains.”

long-term challenges

Grandich said he believes the problems facing the US economy are deep and fundamental, and he does not see the political will in Washington to address them. “We may start to have problems paying the interest on our national debt,” he said. “We’re going to run into about $33 trillion in debt. If you take a 5% interest rate on that, it’s only $1.6 trillion.”

Grandich said that when Washington faces these issues “it always drops the can on the road,” but he was surprised to see that “the can finally stops kicking as far as Social Security is concerned, and that could become a hot issue as we go forward.” toward the 2024 election,” referring to recent comments by congressional Republicans that they would consider cutting the program.

Transformations in housing and health care

Grandich sees population aging in the developed world driving many long-term shifts, particularly in the real estate and healthcare markets. “I think the days of 5,000-6,000-square-foot homes are over now,” he said. “I think the houses are going to shrink because we’re going to have more residents, they don’t need big houses.”

Grandich believes that the younger population will continue to face serious problems with housing affordability and availability, and this will also affect investment in the housing market. “The price structure for young people now to own a home is very difficult, so we are seeing more money being diverted into rentals and multi-family buildings.”

Grandich noted that the healthcare industry is an area that will continue to see growth even in this generally weak market.

Gold and silver are base metals

Metals is another sector where Grandich sees solid growth driven by fundamentals. “Gold and silver are doing very well,” he said, adding that central bank purchases help support gold. “The fact that they have been able to hold their own over the past year indicates any mitigation [by the Fed] He will see the gold go up. Personally, I think we will bring it to a new level.

Grandich sees great potential in base metals as well, noting that copper supplies are at the lowest level since tracked, and demand for lithium will continue as countries transition away from fossil fuels.

“Copper is my favorite because of the real supply and demand scenario that will shape over the next 10 to 20 years,” he said.

Mining stocks are undervalued

But Grandich believes the real opportunity now is in the mining companies. “Mining stocks relative to gold itself weren’t that cheap, maybe a few decades ago,” he said.

At the top of the food chain, he said, major producers have become “cash-flow cows” after many years of being heavily indebted. “They’re now in a position to use the annihilation that’s happened in the entry-level market, and to some extent in the mid-range producers, to get out there and make a lot of acquisitions.”

He sees opportunity on the junior end as well. “There will be mergers out of necessity, and there will also be mergers and acquisitions because things get really cheap.”

To find out which mining companies Grandic thinks are ready for a takeover, and how he sees geopolitics affecting markets in 2023 and beyond, watch the video above.