Below is a long term snap shot of HUI gold mining index.
This sector is pretty much hated by everyone. Since 2011 it has been battered and bruised. Even the hardcore gold bugs have thrown in the towel and abandoned this poor sector. This catches my interest. I like to be where everyone is not. With an all in sustaining cost to produce an ounce of gold at about 850$ per ounce and a gold price at 1300$ per ounce this makes for some pretty hefty profit margins. Mining shares seem to come roaring out of the gate in the beginning of each year. Which is why we opened a few positions in the red headed step child of the financial sector.
Looking closely, we see the HUI is where it was at in 2008. That’s when everyone thought the world was coming to an end. Don’t worry about them crashing. They have already done that.