sth african 'golds' to fall another 25% ??

This guy thinks so .... pretty painful if he is correct !

"What will save South Africa's gold shares?
By: Pitcher
Posted: '13-JUN-04 18:18' GMT © Mineweb 1997-2004

The writing is on the wall for South African gold shares. Even the might of the US gold investor, so long the cornerstone of local gold share prices, has failed to stop the drift of the gold index on the Johannesburg bourse. The index has dropped to 1 700 points, which is a dramatic decline if one considers it was at 2 500 in January.

Nick Goodwin, the often-controversial gold sage, reckons it will not stop until it falls another 25 percent. There will no doubt be a chorus of demands for Goodwin’s head from die-hard bulls, but his logic is hard to fault. Mineweb’s research shows that on an operating profit basis, nearly half of the major mines in the country are unprofitable at the current gold price. Goodwin’s famed cashflow models, which calculate “real profit” after accounting for capital expenditure, shows that no less than two-thirds of the mines are burning cash.

With those fundamentals, it becomes harder to make a case for the optionality that so many investors use to justify their gold holdings. Is there hope of reprieve for the embattled gold producers? Hardly. Conventional wisdom suggests that the weakening rand, which is crucial to boosting rand revenues, will be negated by a simultaneous weakening of the dollar gold price. It means that the rand gold price will likely remain unchanged. The corollary is also true, in that the stronger dollar gold price usually brings along with it, a stronger rand.

That leaves the fundamentals of the local gold industry in peril and tens of thousands of jobs at risk, unless the link between the rand and the gold price can be unhinged. At a minimum, that will need aggressive interest rate cuts, a price the South African government has shown itself to be unwilling to pay."