is this time to short gold?, page-42

CW,
your views are shared by many in the investment community. But i can gather from past experience that there will come a time when the stocks go parabolic. This scenario will only happen when the mass psychology kicks in. At the moment, i believe that we are looking at a gradual retreat by the shorts and the movement of hedge funds into long positions in the royalty companies and specific low cash costs majors.

If we start to see the HUI above a key level of 580, i foresee that there will be another flood of technical investors buying into the stocks. Once the newsletter writers start to promote the junior stocks, we will see a move towards a mania.

Another point that i would like to make is that investors will need to look into the seasonality of the mining prospecting firms. As an example, for northern and/or high altitude projects, there is no seasonal news flow due to the winter season stoppages. Generating no newsflow means that there is no speculative appeal. This generally translates to a lower number of buyers on the market and subsequently lower share prices. I usually buy the shares in winter and sell in the summer. One can employ that on a year round basis if investing in international markets.

Meanwhile, gold has just breached $1800/oz and sits at $1810/oz! Let us see if this new resistance level confirms for the next couple of days.