"Please find attached an excerpt from the quarterly report (Sept.30 2010) to Seabridge Gold Inc.'s shareholders.

"In my view a very interesting approach to further price developments."

David Fuller's view Seabridge Gold deals in gold properties in North America. Consequently, its views reflect a strong bias towards gold. That does not mean that they are wrong but they offer a gold bug view which I do not automatically assume is correct. Here is a sample:

We are watching the slow demise of the current monetary system. We cannot know at this time what will replace it. Undoubtedly, there will be much confusion and several false starts before a new, trustworthy monetary order can be achieved. In our view, a successful transition to a more stable monetary system will require the reintroduction of gold as a central monetary asset which limits the ability of governments to print money. If the world's governments and central banks are not able to formulate such a system, the market will eventually do it for them by demanding payment in gold. In this period of uncertainty, we believe gold is more likely to preserve and enhance wealth than any other asset.

Gold share prices have not reflected anything like the increase in net present values that have been generated by the higher gold price. In part, this reflects the fact that gold share investors are not yet convinced that higher gold prices are here to stay.

My comment - We have had gold standards before so no one can say for certain that it could not happen again. However I would not hold my breadth in anticipation of a new gold-based monetary system because a handful of comments aside, I see no groundswell of official opinion in its favour from North America, Euroland or Asia. Few indebted governments would favour it because they would fear the deflationary disciplines of a gold standard. No government would feel that they held enough bullion and do we really want to see private investors banned from holding gold once again?

What about gold shares?

They are not doing badly, judging from these weekly charts for the Philadelphia Gold & Silver Index and the NYSE Arca Gold Bugs Index. Investors in this sector may also wish to monitor this chart of HUI divided by bullion. It moves higher when gold shares are outperforming bullion. The Library has more back data for another ratio, this time showing the price of bullion divided by XAU. It declines when gold shares are outperforming gold bullion. I assume that Seabridge Gold mentioned above is lagging because it lacks earning, yield and a significant new deposit of gold.

What about gold bullion?

I remain a long-term bull but I like gold a little less with each new high. Currently, some predictable mean reversion is still underway towards the medium-term uptrend represented by the 200-day moving average. Currently, like platinum more than gold because the ratio of platinum divided by gold is in the lower side of its long-term range. The Platinum ÷ Gold Ratio seldom trades below parity (1.0) but it has moved above 2.2 on three occasions during the last 10 years.