Well, the premise seems at odds with the views of our resident fundamentals guy, but then again this is the MSFN (mainstream financial media). What I am interested in however, is the other goofy stuff in the article compliments of the kind of people who hate gold because it got out of the barn a decade ago without them.
So on the one hand you have stock pumpers pimping out the Northgate / AuRico combo, and on the other you have this kind of gold hating. A truly multi-tasking article from Bloomy:
Edit (10:43) Okay, pardon me. I thought the highlighted quote below said "drops to $300 an ounce" in a Prechterian feat of bear bravado. I stand corrected and should probably just slow down... breathe... ohhhhmmm. FWIW, I agree that gold could lose 300/oz. on an intermediate correction, although that is not the most likely scenario.
“Ultimately, people think gold can’t go up forever,” Baltimore-based de los Reyes said in a telephone interview. “As the price goes higher, you’re going to be less willing to price it in because you think it’s in a bubble.”
While Thomas Caldwell, chief executive officer of Toronto- based Caldwell Securities Ltd., says that bullion may have already peaked, the relative underperformance of gold stocks means that AuRico’s purchase may make sense even if the metal drops by $300 an ounce, he said.
“Bullion itself may have a pullback here and it could be pretty brutal,” Caldwell, whose firm oversees about C$1 billion, said in a telephone interview. “That does not necessarily mean that this is a bad deal. The stocks are not quite as vulnerable, and they have not built in these high prices. That’s why it makes more sense for companies to take over each other.”