Hi Everyone, The multi-billion question is whether this is the...

Hi Everyone,

The multi-billion question is whether this is the end of the recent downtrend or the start of a new downtrend. Whatever it is, it sure did the damage. What a clinical job those people pulled off. China on holidays for a week, physical demand from India was already weak, NFP jobs report on Friday. Same thing happened in 2011 when they broke the back of gold while China was on their golden week holidays.
I had a fear if 1300 breaks it will be bad but I didn’t think it would go that low. Now we are pre Brexit level. After the Brexit the longs tortured the shorts, now the shorts have reversed the table. Shhh… ( that’s one speculation)

Just when I was getting so comfortable holding all my goldies, selling 3 straight months of gold price above 1300, this serious pullback happened.
I really believed we will see 1400, we were so close. Now it looks like it may never happen. I even doubt it will break 1300 without some major catalyst. The thing was apart from the UD dollar, gold was at or near or in some case above its all-time high. It still is at all time high in some currencies. Gold is an international thing although investors only think in US dollar terms. So I guess what happens is those people who buy in other currency find it very expensive and if somebody bought it earlier even decide to sell and wait for lower prices. On top Chinese and Indians (the big physical buyers) are not renowned for paying top dollars, they are always looking for bargains.
So maybe the physical demand was weak at those high prices. I will just give my example…I buy physical as well…1-ounce gold bars(PAMP) and 1 kg silver bars.
But since the price went so high I stopped buying physical, last year I was paying 1450-1580 for an ounce, it went up to 1850. Same for silver 600-710 for 1 Kg bar, it went up to 960. With physical, few people buy to make a profit. I usually buy as a form of savings, I buy and I forget about it. I never intend to sell. So that’s another theory for this takedown.
So that’s another theory for this takedown.

Nevertheless, BDR should have a fantastic quarter selling at least 42-48K ounces above 1300 for the whole quarter. And to be honest the price now is not too bad if you can produce at 800. Even if this price holds above 1250, BDR will not only survive but in fact thrive. I only wished if the management hedged even 20-30 percent of the production above 1350. That would have been good. But the sentiment was different couple of months ago compared to it today. The gold market was on fire, the bull was roaring, it almost became a bully. Now the young bull is injured . Maybe it ran too fast too hard too soon. The bull needs some rest.

All the best.