You seriously think gold price can go to $5000 while all the mining input costs such as diesel, CAT trucks and spare parts, labor all stay flat ?!
Per Armstrong the rabid gold bugs need to go bankrupt before we can see the turn in gold. Hopefully the current plunge in gold won't stop until they have all capitulated and the decks have been cleared:
So Who is Still Long in Gold?
As you move into a major low, it is not about who is still long, it is who is short. As gold capitulates and spirals lower, the gold promoters are running out of nonsense to justify it rising while the world is declining. What happens is two aspects. Those who have been long lose their shirt, pants, house, wife, kids, the car, and the dog. The buy-every-dip-average-in advice becomes toxic, just as it did during the Great Depression in stocks – hold now for new highs by year-end is always the prediction. So yes, the investors married to the trade typically lose everything and when the cycle changes, they likely will not buy again unless new highs come into play for they will say, “No thanks, been there done that.” Any rational person can analyze the sales-pitch about fiat and hyperinflation and see that they existed for 19 years as gold declined. Such fundamental analysis scenarios always crumble to dust and fall to the ground for they are never true to the history of events.
At the top, the majority is long and they become the fuel to make any market crash and burn. Shorts and conspiracies do not force markets to decline; it is always the LONGS themselves. Someone whom is long sells because he cannot hold and each has a different pain threshold. The market crashes for there is no bid. It takes courage to try to catch a falling knife. Again, this applies to ALL markets.
armstrongeconomics.com
