Gold stocks

There will be a massacre of gold stocks on Monday.  The lemmings have started the run.  The momentum will lead many down the cliff.  The US economy has not suddenly improved.  The signs are patchy yet investors are piling into stocks and dumping gold.

I have been mostly a contrarian based on simple arithmetic.  As RB said, people need to eat, so I bought more AGR.  People need oil to move, so I bought a little more KAR, SXY, PVD, OSH and ROC.  Tin is in short supply and will be so I topped up on KAS.  Overall, my activity has been curtailed because irrespective of logic, the market is moving somewhere irrational.

More gold stocks will fall but as POG tumbles, so will mines.  The current demand-supply equation based on what is produced and what is bought is in favour of miners.  But when you add in the hoard of gold flooding the market from vaults, then the POG will fall.  Profitable mines (meaning low cost mines) will suffer as well because it is difficult to ramp up production and why sell your defined resources into a cheap market?