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About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, June 27, 2013

Gold Bear

The bear market in gold has ripped along this week. The metal is down 38% from the
all time high of $1900 + set in 2011, and with the future just below the $1200 oz. mark,
the price has fallen below the all-in cost of production for the more marginal producers.
The production cost of gold has accelerated over the past decade as the sweet and easy
veins have been played out and more costly and environmentally destructive methods
have become more prevalent. With the gold price now down within hailing distance of
my $1150 oz. cost assumption, I am retiring my shorting activity on fundamental grounds
an am adding gold to my list of assets in which I might take a long position from time to

The last trend support line off the 2001 base around the $255 level extends up to around
the $1100 oz. area now. There lies the last support refuge for the gold monks who maintain
the market remains in a bull mode. As oversold as this market already is, the current
free fall chart pattern has to be causing some uncomfortable gulping over at the golden
cathedral where the monks ply their trade of spinning gold bull market stories. But, with
gold down near its production cost, that's now water under the bridge for me.

Gold Price -- Long Term Log Scale Chart

1 comment:

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