The stimulus will happen no matter who wins and that is good for metals and gold, said Peter Hug, Kitco’s head of the precious metal division. Hug spoke to Kitco News Thursday as Republican and Democrat leadership continued negotiating a COVID-19 stimulus package in excess of $2 trillion. Some Republican senators are holding out, but Hug said a deal will happen because there is too much pressure from businesses and the states.
He's Peter hug, head of precious metals here at kitco. Peter. Welcome back. Good to be here, Michael. It looks like gold is still waiting for positive news on the stimulus talks. So, I mean, uh, uh, both the markets, uh, the equity markets and the, and the metals markets are hoping for a positive result in, in some kind of stimulus package you had before the election.
Becoming less likely day by day. Um, but it will come whether it comes before the election or after the election, I don't think it'll matter who wins the election. There will be a significant stimulus package to follow, uh, whether or not it happens before the election. Uh, it's just a, it's a flip of a coin right now.
Uh, let's talk about, uh, that likely outcome. Um, there could be an instance where you're looking at, uh, the Republicans retaining the Senate while you'd have, uh, the, um, you'd have, uh, the presidency and, uh, the house is still going to the Democrats. Uh, when did that to be a concern in terms of actually there being a dampener on actually having a stigma, uh, It's possible Biden might be able to do something, uh, if he went to the presidency by executive order.
Uh, but yes, that would be a, uh, a sort of, uh, a worst case scenario where you have a government that is gridlocked. Uh, and, uh, the Republicans refused to, uh, uh, to endorse a stimulus package that the Democrats will put forward. Uh, but I think all of the congressmen are pressured right now. I mean, every state has a surgeon COVID, uh, the economies, uh, on a state level are, are struggling.
And, uh, from, from a U S economics perspective, uh, and certainly from a stock market perspective, uh, I think a stimulus is absolutely necessary, uh, and they'll come together on some type of a package, no matter who the president is. Uh, it's just a matter of the size of the package and, uh, you know, where the funds are going to be channeled.
What's been interesting about this gold bowl is this is that we have seen a gold Doug, uh, trading with stocks. Uh, you did say something interesting last week where you are earlier this month, I should say where you're seeing a little bit of diversions between how gold was trading and how the stock Mark was trading.
They've been fairly consistent. There've been the odd days where they've diverged, but, uh, you know, today, just, just for an example, uh, w when, you know, when the equity markets went into positive territory, the, uh, you know, the market, the metals markets rebounded from the sell off this morning, you know, I think the market is just overall, extremely nervous.
Uh, and you know, when you get this type of nervousness in the market, Um, without something very concrete on the stimulus side coming out, uh, uh, you know, there's just a tendency to move to cash. I mean, from a, from a market perspective on gold. Uh, you know, we're still trading in the range. It's been trading in sort of the 1875, 1925 range for the past three to four weeks.
Uh, and, um, you know, and I think that range will, uh, will remain, uh, you know, until after the election. And then depending on who wins the election, there's going to be a knee jerk reaction. And, uh, and you know, the markets will find their path depending on who wins and, you know, how's the Senate set up, but, you know, then the, the fund managers will be able to make decisions on more rational basis as to what they expect to see over the next three to six months.
And until then, it's just the uncertainty. And, you know, when uncertainty occurs. Uh, again, most investors tend to at least park some of their assets into cash, just in case there is, uh, a sell off both in the equity and the metals markets, uh, after the election. Uh, so they have some dry powder to, uh, you know, average down eight or how is physical supply?
The goal supplies are still a relatively constant, uh, Buffalo's Eagles. Maple Leafs are in a ready supply. Premiums are similar to pre COVID. Uh, some of the smaller units, one ounce gold bars, uh, fractionals are still, uh, Hard to get, uh, I mean, they're coming onto the market, but in very small quantities, as soon as they come up on dealer sites, they're gone.
Uh, so those premiums are still fairly exaggerated from pre COVID, um, levels on the silver market. Uh, Supplies are coming in again, not to, to, to the extent that the dealers would like to see the supplies. Um, a hundred ounce silver bars are, are generally available now. Um, silver Eagles, um, Somewhat available.
Uh, the 2020 ones are, are scheduled to come out, uh, in January with a new design. Uh, so dealers are trying to figure out how, uh, you know, what type of inventory to accumulate in 2020s, uh, and, uh, and, uh, you know, sort of max, max that out to the perspective that, uh, moved those coins away as the 2020 ones come onto the market early next year.
So there is some jocking around, uh, on, on silver product. Um, silver maple Leafs, uh, again are still on allocation. So the market demand, uh, with this consolidation over the past four weeks is, uh, has dropped considerably from the retail investor perspective. So the supplies that are on the market are meeting the demand.
Uh, and premiums are coming down. Uh, silver Eagle, uh, last I looked retail were available in the three $54 range. Um, when you compare that to $12, two months ago, uh, silver Maples are in the spelling $3, depending on quantity, a up to about three 50. So the premiums are starting to resemble what they were pre COVID, uh, for silver coins, but supplies.
If you're looking for larger amounts, they're still, um, are still questionable. Peter, we're still waiting to see the outcome of the selection, but, uh, you're still a long-term bull on precious metals. Oh, absolutely. And he doesn't, in my opinion, doesn't matter who gets elected as president. There's not going to be an option now from, uh, from the government's perspective, but to, uh, to create a, uh, significant stimulus package.
Um, coming, uh, coming out of the election, uh, and you know, in the neighborhood of what we saw earlier this year, but certainly at least at, at sort of a $2 trillion Mark, uh, no doubt in my mind that no matter who the president is, uh, that, that, uh, stimulus package is going to be presented. And I think that's going to be very bullish the metals, my concern, uh, if I had a concern on this market, my concern would be a contested election.
Um, which would be negative for the stock market and, uh, If the stock market takes a hit, uh, there are analysts indicating a five to 15% drop, uh, uh, if it's a contested election, uh, I would consider that a buying opportunity. Uh, but in that context, uh, I could see the metals reacting similarly, as they did in March, where the first reaction would be down as people raise cash.
But I think any drop in this market, uh, especially, uh, in, in the metals markets, uh, should be viewed as a buying opportunity. Uh, I see highs, the highs we saw this year easily taken out, uh, no later than first quarter 2021. Thank you very much. You're welcome.