Top Stories This Week: Gold Corrects, Ross Beaty Says be Patient on Stocks
Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.
After several weeks of exciting upward momentum, gold took a break this week.
The yellow metal fell back under US$2,000 per ounce, even dipping below US$1,900 during the period. Market watchers have blamed the fall on positive US economic data, reports of a COVID-19 vaccine from Russia and a wide variety of other factors.
But some believe a correction was simply a necessary development brought on by gold’s quick rise. I spoke with Nick Santiago of InTheMoneyStocks last week, when gold was still at around US$2,050, and he said that he wouldn’t be a buyer at that level — he would wait for a pullback, a move that he thought was in the cards considering gold’s rapid ascent.
“I’ll pick up gold again on another nice pullback or a correction. And you will get that eventually — nothing goes up in a straight line in the markets” — Nick Santiago, InTheMoneyStocks.
Santiago is bullish on gold long term, and so is one of the mining space’s most well-known figures — Ross Beaty told me this week that he’s bullish on both gold and silver for the foreseeable future, noting that the underlying factors that are moving those metals are not going away any time soon.
He also shed some light on a question that many investors are asking at the moment, which is why gold and silver stocks are not moving as much as the metals. Ross said it’s important to be patient as usually the majors move first, then the mid-tiers and finally the juniors. His major piece of advice? Take some money off the table if you’re feeling nervous, but be careful not to sell too soon.
“I don’t think the fundamental reasons for gold and silver doing well are going to be at an end any time soon. I really do think we’re going to have these continuing strong markets for some foreseeable period in the future” — Ross Beaty, Pan American Silver (TSX:PAAS,NASDAQ:PAAS) and Equinox Gold (TSX:EQX,NYSEAMERICAN:EQX).
With that in mind, we asked our Twitter followers this week if they took advantage of gold’s price fall and bought the dip. By the time the poll closed, about 75 percent of respondents said that they had.
Looking over to cannabis, INN’s Bryan Mc Govern spoke with Ashley Chiu of EY about M&A activity in the marijuana market. Financial circumstances in the industry remain difficult, and she said smaller names in the space may look at mergers in order to strengthen their positions.
“I would say that I do think that there will be more entries from these adjacent players, the more well-capitalized, more mature, more established companies, but it’s really going to take more milestones … before that happens” — Ashley Chiu, EY
Chiu also touched on the possibility of major non-cannabis companies entering the space — this is something that was expected when the industry was younger, with rumors that giants like PepsiCo (NASDAQ:PEP) and the Coca-Cola Company (NYSE:KO) could step into the market.
Moves of that scale have for the most part not yet been seen, but she said it could still happen once the industry is more established.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.