and gold stocks, as measured by GDX, are down 1% this week. I can only assume all the hedgies who are short are convinced that earnings are going to be dismal when reporting takes place in February. It is becoming more abundantly clear that even though the gold stocks have been pounded to dust, they still have little to no correlation to the price of gold (unless gold is down), then these sell of very sharply (like this morning).
I really believe investors are looking for cuts to capex and a substantial increase in EPS before they buy. The mining sector is very guilty of throwing far too much money at projects and having expenses multiply quickly rather than being more prudent in their decisions and controlling cost inflation. I don't believe the reports next month are going to be pretty so I see these selling off quite a bit more than they have already. When ABX reported on Nov 30, their share price was $40.50 and they were pounded down 10% that day. The stock has continued downwards since then and won't do anything good until they prove they can control costs and increase EPS. For those of you that don't think ABX & NEM affect GG, guess again. GG reported first last quarter and beat, so they got a 3 day pop. Then ABX & NEM disappointed on the same day and now look where GG is. It may seem weird cheering for other miners but perception is reality. If it is perceived the miners are getting costs under control then they will see some buying. Until then, they will continue to be shorted and continue to disappoint the longs.