Yes -ve reasons do contibute to higher gold prices but at the end of the day they do not benefit gold miner's profitability b/c they may outweigh the POG. The main stimulator as we know for the POG is weakening of the US$ and other currencies and economic circumstances. The profitability and -ves are clearly illustrated in Sth Africa. (Although in SA now we have the addded issue of power cuts effecting production and therefore output -which for these gold companies is catastophic but +ve for the POG).
IMHO he is saying he isn't sure whether the 5 -ves will out weigh the 2 +ves. So he goes on to then look at the HUI and XAO which he then illustrates via the graph "the building megaphone pattern" ie that is to say that the POG is running away from the stocks contained in the HUI.
He then points to India as the wild card. As they have a different physcology to the west, selling GOLD at ATH rather than accumulating - somehat contrarion if you like to the west. But again those Indians who have invested in the stock market will be looking for a safe haven - GOLD
He does say though that the timing of the crash will be the ultimate factor in ths. ie like last Tuseday when we experienced a sudden large drop the gold stocks suffered as well. As we are seeing now gold stocks sp's are recovering somewhat, paricularly those of producer status. So the key determining factor will be how long people have to recognise that gold stocks in the long run will be a better investment than other stocks.
He conclusion is therefore: "Buy physical gold and then not until everybody and their brother decides that gold stocks are the only place left to invest in."
History actually illustrates that there is a cycle in times like now 1st Invest in Physical gold and silver. As gold stocks suffer like all other stocks in a market with sudden drops and despite the POG rising. Eventually major gold stock producers sp's play catch up as investors look to safe havens and then later gold stock specs. At this point in the cycle "physical gold" will produce better returns for the investor - all according to the cycle. It is just like Silver will have it's time too in this cycle.
These are my opinions only and should not be taken as advice. DYOR and Golden Luck to all.
