Money continues to consistently flow out of the gold sector, so there would be quite a lot of people that would agree with your view to go short some gold miners.
I am trying to cost average into a large long term investment position, but only at what I think is the right price. For me the right price for bullion purchases would be below 850 USD. I would be surprised if I get a chance to buy more at those levels.
At 850 per ounce I would expect NCM to be around $1 or $2 per share. That sounds extreme but NCM hit $7 when spot was 1180. The type of capitulation required to get spot gold to 850 would destroy many gold shares.
I think for gold shares there is value when spot gold hits low 1200 high 1100 in price. However if there is a bigger drop in price, I still have capacity to add more.
Gold shares vs gold price is at an extreme, soon either the gold spot price will drop rapidly relative to gold shares, or gold shares will move up more aggressively on any price rise.
I hope your short goes well, there is a lot of price activity in gold now, if it breaks down you may make some good money quite fast.
