So roughly two years ago we anticipated that ABX would trade down to about $16 and then back up to slightly over $40. Had you bought at that level you would have paid a few dollars more than absolutely necessary but in any even you would still be looking at a solid double + in 2 years. The two counts that we had at the time are still valid so the matter has not yet been resolved. My guess is that this is the green scenario, that is the B wave up in an otherwise ongoing downward trend so I would be inclined to sell. Fundamentals that might support this view are that whereas gold itself has made new highs this stock has not. This despite the fact that production costs, mainly diesel fuel, are substantially lower now than at the previous peak. Also there is a dividend increase and talk about getting listed on the S&P. Given all that the stock should be much higher but it isn’t. Early this morning gold dropped by , give or take, $80 right on the open so perhaps the stuff itself is also turning.
We have no idea where gold might be going at this time but looking at the chart below (Macro Charts) it certainly looks like it is long overdue that the spread between gold and stocks should narrow.The blue line represents stocks, the other gold.
