Rick Rule, Chairman of Sprott Global Resource Investments Ltd., has been involved in natural resource for four decades.
Rick says he expects some familiar patterns to emerge in the coming year.
See below for his most recent comments.
Sprott Global: Rick, you’ve predicted an impending bear-market bottom in precious metals and natural resources. Are we there now?
Rick Rule: I believe we are. We’ll see a rising market with higher highs and higher lows. We’ll also see high volatility -- which one day will elate you and another day will terrify you. That’s the way this works.
As we’ve discussed before, bear markets lead to bull markets; and this bear market will end at some point. Let’s take a look back to 2003. The first third of the year was truly terrifying. Buyers were exhausted and a lot of people were selling. The price charts of both commodities and equities looked like ski hills, falling rapidly from the upper left to the lower right of the page.
In the middle part of the year, we had a ‘flat-line’ experience. Sellers were exhausted but buyers were exhausted too. So the stock charts were horizontal.
At the end of the year, we began to see ‘bifurcation.’ The best of the issuers and some of the commodities caught bids. In the absence of sellers this caused dramatic price moves upwards on relatively small volume. Some of the juniors -- like Eurasian Minerals Inc., Almaden Minerals Inc., or B2Gold Corp. -- went up by double-digits with only minor buying.
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The miners have started 2014 very well indeed on the back of rising gold prices, so the question is; is this the real deal?
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