Sprott On Economic Fundamentals (and Gold)

By: Ian Campbell | Tue, May 1, 2012
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In a recent article Eric Sprott and David Baker express the following opinions:

Concurrently, Sprott and Baker say:

Sprott and Baker have rather nicely summarized economic matters in a way that most thinking people who follow macro-economic reports and announcements closely likely agree with. Their comments on physical gold should be considered in the following contexts:

Assuming no radical positive change in the European, and American macro-economic prospects, while traders taking profits and losses in 'paper gold' products may continue to create gold price volatility, over time if Sprott and Baker are right about physical gold demand overtaking physical gold supply, the physical gold price ought to trend upward from where it now is.

An important question is whether one is a trader of paper gold looking to make short term profits by timing the market, or a holder of physical gold as a safe haven - or is both a trader who looks to time the paper gold market volatility, and concurrently hedges his/her bets by owning physical gold.

Neither physical or paper gold 'are for' those who don't believe they understand gold and the gold markets, or for those don't have the stomach for gold price volatility in circumstances where the physical gold price does not appear to behave logically in the short term.


When Fundamentals No Longer Apply, Review the Fundamentals
Source: Sprott Asset Management LP, Eric Sprott and David Baker, April 2012
Reading time: 5 minutes



Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Business Transition Simplified

Through his www.BusinessTransitionSimplified.com website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world economic and financial markets influences on those two topics. A recognized business valuation and transition authority, he founded Toronto based Campbell Valuation Partners Limited (1976). He currently is working to bring his business valuation and transition experience to both business owners and their advisors in our new economic, business and financial markets normal.

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