Looks like Gold's resistance levels are at equidistance to its support levels. The triangle may not be perfect - nobody and nothing is - though you could've have made the same argument for support vs. resistance.
Some, including myself, have been preaching of an imminent tanking of PM's and its shares in the short term - actually following l.t. cycles via Ian Notely's theories. The slump has manifested itself rough and dirty in the shares; Not so in the underlying precious metals itself!
Now, every guru and his brother is recommending to totally desert the mining sector, as it has been proven that they never will make a comeback!
Exactly - Never will they make a comeback for your run of the mill guru and his followers as these extremists will not have another opportunity to build and accumulate a portfolio of miners at bargain prices.
The miners have never before been as sold out, sold short and generally abandoned in a secular gold bull market as today. When, and not if the turn around happens - and I suspect sooner than anyone believes - the crowding in effect will be of such magnitude that no-one able, willing and liquid will make it back in!
... Position yourself accordingly in this environment of sheer desperation in the mining sector ... Hey and sell your Google, as long as its market cap is higher than the total US Auto industry ....
... and the following comments about gold industry execs are not totally undeserved :
Interesting comments
(whatsup) Apr 22, 14:32
ZURICH -- London based resources investment manager Graham French delivered a brutal but deserved rebuke to the majority of gold company bosses for putting bankers ahead of shareholders.
French was a keynote speaker, along with US Global’s [GROW] Frank Holmes, at a luncheon convened for the European Gold Forum.
French is one of the most influential equity owners in the industry. His group has around $12 billion invested in precious metals and the particular fund he manages, the Vanguard Precious Metals Fund [VGPMX], is worth $1.3 billion, and has been a top performer over the long-term.
He dressed down gold producers for failing their owners in several areas including hedging, returns below the cost of capital, a fetish with retaining earnings rather than distributing them as dividends, elevating growth above returns, and avoiding rights issues for fund raisings.
French blasted the deference to banks. “When we asked gold producers why they hedged at $300 an ounce. . . they said because the bankers told them to. Now I ask them, playing Devil’s advocate, why they aren’t hedging at $430 an ounce, and they say it’s the bankers again!”
He urged companies to address their investors once more, not their bankers or advisors.
“It’s about returns, not growth or geology, or maps, or anything else,” he said.
French said that over the past 16 years, the gold sector’s cost of capital was 6%. However, the industry had only managed to achieve returns over that period of 2-3%. In other words, the gold equity industry is responsible for destroying wealth on a tremendous scale.
Only twice has the industry returned a result higher than its cost of capital – in 1992 and 2003. French noted, with pained irony, that those two years also marked the sector being the best asset class. That translated into significant multiple expansion, but it was quickly squandered by a return to the old ways.
Speaking to Resource Investor afterward, French agreed that part of the problem is entrenched pessimism. Company management is more concerned with stockpiling money in advance of a downturn in the cycle than it is with maximizing returns. Similarly, producers are not mining at higher grades to take advantage of higher metal prices, but are rationing deposits with ascetic zeal.
Pay dividends
French cited a University of Chicago study which showed that over nearly 60 years companies that paid the highest dividends outperformed the market on earnings and return on capital.
The difference is staggering. Dividend payers achieved annual rates of return of 4.2% versus 0.4% for companies that did not pay dividends.
A dividend is a reflection of management confidence, said French. Those who pay them are secure about future earnings. Those who retain them are less so, but even more dangerous, they are prone to use retained earnings for empire building.
“I’m fed up with size arguments. . . claims that big is beautiful. It is about returns. I don’t give a damn how big your company is, just how much it returns” French said.
His view highlights the professional battle between bankers and hedge funds, who are driven by short term fees and arbitrage tricks, and fund managers who rely on much longer time frames.
Reward your shareholders
Pretty good and heady stuff - Cheers frr
