In the next two weeks, the majority of the large cap producers will report earnings. I can already envision the press releases; reduced production guidance, missed earnings, cost overruns, lower than expected margins, rapidly increasing labor costs, government interference, too much rainfall, in general they will all bomb their quarters. What else is new in gold mining? But after the downgrades are finished, people will hopefully come to realize that most of the majors now have growing production pipelines and trade for very low multiples to current and future cash flows.
I cannot remember seeing a sector that is more hated. The sentiment is just awful. None of my friends can even bare to look at their screens any more. According to the Hulbert Gold Newsletter Sentiment Index, the majority of gold newsletters are recommending that their readers get short gold. Remember, these are the same guys who mostly make their money selling subscriptions to lunatics who think the government is coming to confiscate their gold. These newsletters are now net-short and have been suggesting for their readers to get short for almost a month now!!! MarketVane and other sentiment indices say similar things