John Hathaway, Senior Portfolio Manager at Sprott Asset Management, stated that in the current economic and geopolitical environment, reaching $3000 in gold prices next year is not unattainable, and the impact of a 15-20% increase in gold prices on mining stocks is far-reaching.

After discussing the Federal Reserve's tightening monetary policy and the real possibility that long-term high interest rates may lead to an economic recession, Hathaway was asked why mining stocks still have a significant historical discount relative to gold prices.

He said, "We have some mining companies whose stock prices are historically low compared to their net asset values, which is very disconnected from the relationship between gold mining stocks and gold prices. Although it may not be as severe this year, it has been so in the past five years. I believe that assuming gold prices remain at these levels, we will face huge mean regression trading. Then I can present an argument to explain why they can go higher if and when people lose comfort and complacency with their current positioning. I think this is the future, and that's why I want to say that even if gold prices remain unchanged, we are still at the forefront of a significant rise in mining stocks."

He also refuted the view that the central bank's gold purchasing behavior is unsustainable and sovereign demand will dry up. Since 2022, the central bank's purchasing behavior has driven up gold prices.

He said: "The reason why central banks have been buying is that we have seen changes in the way trade takes place, especially in the BRICS countries." He also said that some Middle Eastern countries have used currencies other than the US dollar for oil trade settlement. After a trade surplus, they invest in US treasury bond bonds and then charge interest.

Hathaway said: "Central banks have been buying gold to recover trade surpluses and settle trade deficits and surpluses with gold. Compared with the dollar, gold is a neutral reserve asset. This impact on the future may not become obvious in a few years... (But) the capital pool that used to be useful for discovering US treasury bond (because they can recycle trade surpluses into US treasury bond) no longer does so, so we see the supply of US treasury bond increases while demand outside the US decreases."

He also insisted: "I don't think the central bank's purchase is a foam, which is the main reason why the gold price is at a record high today. I think it reflects the repositioning of the global trading system with sustainable characteristics."