RE: RE: something smells here LOL, it's my fault. I upped my position by 50% at 0.55 so of course it dropped further.
I don't mean to minimize the pain that people feel, trust me, I feel it myself. But it really helps to step back, tune out the media noise, and look at the fundamentals. Forget inflation, forget money printing, forget all that - that's what brought the momentum crowd into gold. Eventually this all will matter, but for now the momentum crowd all rushed to the short side.
So look at simple supply-demand for 1Q2013. Mine production was lowest in 4 quarters. Recycled gold (which is 1/3-rd of supply) was lowest in 2 years. The only reason gold was in oversupply is because the "hot money" (= ETF's) went from demand to supply side of the ledger. And they are still there, ETF's dumping gold into the market. But here's the beautiful thing about it: ETF's jointly have probably less than 6 months worth of gold supply. So shorts may force a few more hundred tons out of it, but this is a very limited source of supply. Mine production is a long-term thing, but recycled gold supply is very price-sensitive. I bet recycled gold already dropped quite a bit and when ETF's stop being a part of supply, the market will have to go to supply-demand equilibrium which is - without ETF demand - probably around $1500-1700/oz. And we don't need gold to go to $5000 in order for ORV to go up 4-5 times, $1600 gold will do just fine. "Hot money" always overshoots, that's what creates these great opportunities. GLTA longs.