Mr. Sprott believes the yellow metal is safer than paper money, which can be printed by governments. He backs that up with his own investments, saying a few months ago that he has about 80 per cent of his money in the precious metals sector.
“I think [gold] will end up for the year, just like in 2008 ... because in a financial crisis, you don’t want your money in a bank,” he said.
He compared the current pullback to 2008, when the price of gold fell 30 per cent in eight months amid the financial crisis to $712 an ounce, only to rally to $873 by the end of the year and more than $1,900 by September 2011.
Mr. Sprott expressed his resolve for gold a day after prices nosedived nearly 10 per cent.
Mr. Sprott asked his investors to stay the course on a conference call Tuesday, and even encouraged the purchase of more physical gold and silver as global investors flee from risky assets and commodity prices tumble.
Eric Sprott is a Canadian hedge fund manager and founder of Sprott Asset Management. He became a billionaire on paper with the initial public offering of Sprott Inc., the parent of his Sprott Asset Management firm.