The Case for Gold
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PLEASE NOTE THAT THIS INFORMATION EXPRESSES THE VIEWS AND OPINIONS OF SEABRIDGE GOLD MANAGEMENT AND IS NOT INTENDED AS INVESTMENT ADVICE. SEABRIDGE GOLD IS NOT LICENSED AS AN INVESTMENT ADVISOR.
An Interesting Year for Gold
The past year was a most interesting one for gold. On the one hand, the gold price rose 18% during 2005 and touched a 25 year high early in 2006. Gold rose against all major currencies and against most other asset classes including U.S. equities and bonds.
Second Quarter Volatility
Volatility was the outstanding feature of the gold market in the second quarter of this year. After barely nudging through $500 at year-end, gold sprinted into the $730 area in May on perceptions that global liquidity would continue to expand rapidly.
Deflation or Inflation: Gold Doesn't Care
In our view, gold investors should settle back with some popcorn and enjoy the coming fireworks which will include the best gold bull market ever, with all the volatility that implies. We see new all-time highs just around the corner. The challenge is to take a position and stay the course. Central banks are about to pay for decades of bad policy and gold will reap the dividends.
What is the Stock Market Trying to Tell us?
First and foremost, valuations are too high. Third quarter results have been disappointing. Investors are realizing that sales and earnings cannot grow fast enough to keep the market at record valuations.
Is the Gold Correction Done?
It's close, in our opinion. We are starting to see the usual panic from gold newsletter writers and the bears are back calling for much lower gold prices.