Very close to a bottom hereI spoke with an executive for AEM and there have been informal discussions of forming a gold cartel. Ten of the biggest producers in the worlld have floated the idea out there in informal discussions. This would cause shock waves to any firm that has shorted.
Gold has been dropping for over a year and in the last 6 months big projects have been shelved and alot of supply has been curtailed in the future. Demand is robust but Goldman is playing a dangerous game if they think they can short further. With energy prices falling this has helped gold. in addition any labour contracts coming up in the future will reflect the new uncertainty. The big question mark is that all of these banana republic regimes that were demanding bigger royalties when gold price was at a high in 2011 are now on the verge of toppling. Centerra's mine produces half the GDP of that banana republic it hails from. 50 % of Caledonia's Blanket mine is owned by native African investors. They will figure out easily thatthey can forego some short term pain for a huge gain in the same way that Goldman did this year. A 6 % fall in gold prices the last month has caused IMG to drop 30 %. Id say the boat is loaded now and gold is ready for upside. A carel will take care of it or saber rattlin by anybody with a big position . Come on trigger happy generals, shi$ or get off the pot.
The price for IMG is now at 2009 levels. look how quickly it recovered from those lows. It will be even quicker this time around. I am looking at paired trade of going long gold, oil, aluminum, base metals, and shorting the NASDAQ. I like a few biotech names but the rest is overvalued. BLU is my Canadian pick and OXGN on the American side.