Today I thought I would spend some time studying a a little bit...

Today I thought I would spend some time studying a a little bit about gold prices as, to some extent, in recent months particularly since October, there has been a fairly strong correlation between the price of gold and the SP of junior explorers ... And please feel free to add to, or provide any constructive criticism on what I have come up with... I could possibly have it all backwards or even just missed a critical piece of the puzzle ...

November has been terrible month for gold prices, which have dropped from a peak of $1,941, to more than 7 percent $1781.9 (4 month lows)

(The Good News for Junior Explorers (OAR): Medium - Long term still very Bullish as 'real' interest rates actually remain deep below zero while the U.S. dollar remains weak, expanding public debt, the possibility of a debt crisis or the risk of accelerating inflation when the epidemic ends and people increase their spending) - In other words, the ongoing fiscal and monetary stimulus should support or even push gold prices higher in the medium to long-run. It’s possible that, when confronted with the lack of a fiscal package, the Fed will introduce some changes at its upcoming meeting in December to keep the real interest rates at ultra low levels and to stimulate the economy.

The question now comes, have Gold Prices reached its bottom or will it continue its decline in the Short Term?

One would have imagined that the recent decline in the USD Index (DXY) to a bit lower than its mid August / sept bottoms would have had its usual opposing effect on the price of gold (ie, push gold higher), but it didn't... This is because there are too many external factors weighing negatively on the price of gold.



The opposite occurred! (Gold reacted with a slight decline instead) If indeed Gold was at its bottom, I would have expected gold to have reacted with a visible rally since the USD Index might be breaking lower. This would indicate to me that gold hasn't yet formed its bottom.

Also, with recent vaccine news, reduced US political uncertainty and with Trump reluctantly giving Joe Biden the green light towards a transition to the White House, Investor confidence (as seen by Friday's strength in stocks) is increasing in "risky assets" which has inversely reduced demand for precious metals as a safe-haven. It also concerns me that gold has now fallen below its 200-day moving average (DEC COMEX). This selling of gold futures may further accelerate a decline in gold prices short-term.

So currently, I am not seeing any clear catalyst for gold to rally (short-term over the next few weeks) and think it will decline even further before bottoming. And where do I think this bottom will be? I honestly have no idea!! Gold has already broken through the phycological barrier of 1800, so possibly heading for 1750 or even below 1700 short-term? I would love some input from you guys



Conclusion: Short-term I think POG will continue a slight decline, Long-term very Bullish ...

Let's not forget a great Ann can counter the effects (act as a catalyst) for OAR in light a declining gold price :) - And I must say, OAR has been holding up very nicely ... Talk about strength :) Some JE companies, even the strongest, are down 40-50% !! - Not OAR :)

Hope you are all having a great weekend

Disclosure: I'm probably wrong about all of the above content (Just sharing my thoughts)