Gold!

Feb 21, 2014 | Dian Chaaban


Share

What an incredible week for Canadian athletes and fans all around. The anticipation and excitement is so intense that my access to the word wide web has crashed about two dozen times thanks to all of the game streaming… I actually had to reference a hard copy newspaper to get Word on the Street out to you today, hence my tardy release.

So, recap a nail-biting victory by our Canadian women team who seemed to be outplayed and outscored by the US until they tied it up with 55 seconds left and Marie-Philip Poulin scored the game-winning goal 8 minutes and 10 second into overtime. Yikes!

Couple that with a clean sweep by our Canadian women’s curling team (beating Sweden 6-3 yesterday) and this afternoon’s sweet, sweet semi-final win by our Canadian men’s hockey team thanks to Price dominating the net and Benn picking it out of the air to get the game’s only goal against the US and you have a lot to celebrate!

Our 2014 Sochi medal count is now at a whopping 24 comprised of 9 gold, 10 silver and 5 bronze and thanks to city council, I know you will all be out at your local bar at 7am this Sunday cheering the men on for gold. Speaking of gold, it’s been looking a tad shinier lately…

Less that two months into the year and gold miners have recouped more than a third of what they lost last year with gold jewelry demand close to pre-crisis levels and investment in small bars and coins hitting a record high (according to the World Gold council). That said, Matt Barasch my Head of Canadian Equities (who some of you met at the Stocks, Suits Scotch event last September) released an interesting note yesterday about the gold rally suggesting that he wouldn’t be shocked if gold stocks give back all that they have gained by comparing gold’s three eras: 1970-1982, 1982 to 2002 and 2002 to present and taking a look at the two gold bulls sandwiched around the 20 year gold bear.

He then shared some data comparing gold per person on earth (now at 0.78 ounces, which is an all-time high – meaning that while the population of the world has grown over the past 114 years, gold supply has more than kept pace) and pointed out that despite the rise in global mine supply in 2013 (up 5+% over 2012 and an all-time record in terms of supply), coupled with jewelry and bar demand at record levels in 2012, prices still managed to fall. Why? Well, it’s a supply and demand story that is driven almost exclusively by fast money in and out of ETFs which makes the entire notion of investing in precious metals even trickier than normal – leaving Matt scratching his head as to why a retail investor with a normal risk tolerance would want to attempt to get this right.

Enjoy the weekend.

D.

Dian Chaaban

Investment & Wealth Advisor

Chaaban Wealth Management Group

416.842.4234