I am bullish on POG for two reasons.
1. As a form of money it has not kept pace with the increase in the monetary supply. Despite claims to the contrary by some, gold is money with a number of larger economies having 50% or more of reserves in gold.
2. On the supply side, POG is way too low to justify investment in large new mines other than those with well above average margins. Someone recently posted a study showing the average cost of production including capex is well above $2000/oz. That suggests no where near enough new supply will come on line to replace depleting mines or high cost mines forced to shut down- at least not until POG moves well above $2000 to justify new investment.
High margin undervalued smaller stocks offer the best balance of safety in case golds base pattern continues for longer while also offering stronger upside through higher POG and in BSR's case, development of a very undervalued project.
http://hotcopper.com.au/threads/where-2.2313752/page-40?post_id=13638666#.U75HIUDm4Xw
We have been hearing for some time through mainstream media that gold would weaken this year. Instead it appears to be strengthening. See my charts posted earlier today for my thoughts on the technicals.
http://hotcopper.com.au/threads/where-2.2313752/page-37?post_id=13637188#.U75HXkDm4Xw
http://hotcopper.com.au/threads/where-2.2313752/page-38?get_post=true#.U75HhUDm4Xw
Thanks for your interest.
