IMHO, given the negative headlines for Gold, institutional investors, HF, shorted and cut their Gold mine stock holdings. Given the low liquidity/turnover, that drove prices very low and quickly (look at the GDX, GDXJ ETF and other Gold miners - South Africa, Canada, etc): all are dowm 50% - 90% from their price 6 mths ago. Its quite easy to drive a 20% drop in price with small capital on most miners (cannot do that on Gold futures on the other hand). It's a bit like hitting the weakest link to push prices down... and it worked.
I believe that now that Gold is approaching bottom (how can Gold hit 1000 USD if most mines have break-even production at ~1000 USD and above), and investors panic, I bet they will start buying all those mines again, where retail and other followers will cut at loss their gold miners holdings given how low Gold spot is trading.
Bottom line: Miners are the leading indicator for POG (on the way down and UP). I think the rally will start with miners... Be prepared
SLR Price at posting:
55.5¢ Sentiment: Buy Disclosure: Held
