The recent meltdown of gold price was due to a few factors but was largely due to the implications of the Cyprus events. That was not a coincidence that Goldman Sachs had issued lower price guidance for gold at the same time the Cyprus story was coming out. This started the panic selling and then the negative momentum took a life of its own..I don't believe the conspiracy theory that out government is trying to drive the gold price down, they own more gold reserves the anyone, why would they? .
At this time I think mux should go into preserve and protect mode and delay Phase 2 ..re-evaluate in 6months. I would continue in defining Los Azules and wouldnt even consider of selling it now and continue our efforts to expand El Gallo mine life. Im sure those offering discount prices for Los Azules before probaby are coming back to test Robs position now, but he knows better. Its a good thing we don't have any debt or we would be alot worse off. We are still in decent position and no need to panic and buckle. Sustaining gold cost at San Jose is $1200/oz, so for now we are ok over there. Im sure the up coming weeks everyone will be making big changes, some will be severe. You can't time market bottoms but you can play the odds, I wouldn't be selling any gold or gold stocks and I'm a buyer especially after large a dip like we had recently.
Good article on SA about "trap door" under many PM companies, esp. high cost and non producers. The charts are still in waterfall decline also. Not just MUX. You have two doors: 1. sell now and just walk away, or 2. hold and buy down to lower avg. cost and hold on forever. I think management is solid at MUX and I am able to hold so I will walk through door #2. Good luck to all.
Hey Rx, Do you not see the slowing growth in China as one of the reasons gold fell so far so fast? Also, what is your take on the McEwen article posted here in which he affirmed his belief in rising inflation and $5000/oz gold in the not-too-distant future? Thanks for your thoughts.
Rbmail, your post just appeared. Out of all the factors leading up to last week downfall, China's growth rate carried the least weight, it's growth rate fell very slightly (7.9 to 7.7), what carried the most weight is that the inflation rate has been held in check even in the face of 85 billion per month of money printing. It was thought to be simple and easy to forcast and the bulls were on the run. With central bank's printing money to revive the economy that inflation would rise, but it didnt. I think thats what Rob was counting on as well. What made it worse has been the talk from the fed's camp bringing QE's to a end. I think that has been the main cause of gold bull run coming to a end. The Cyprus story was the straw that broke the camel's back. Goldman Sacks saw it coming. On the bright side, compared to other bull runs from the past this last one that got gold up to $1900 was a weak one, and a much bigger run will be coming. The recent 4 year gold rise was due to the SPECULATION of rising inflation rate that never occured, The next much bigger run will because the inflation rate being reported is really happening, not just due to speculation.
Again, as I said many times before, the biggest risk going forward is how well Rob will contain's cost!. Robs forcast of 5,000 gold is easy, cost seems alot less predictable..ex fuel,royalities,taxes,capital