Today was an absolutely gut-wrenching day to be in gold equities. The only thing worse could be owning stocks of JP Morgan and Citicorp!
The difference is, tomorrow the miners will still be digging gold. JPM and C will be giving sweaty testimony and trying to stay out of jail and/or default.
IMHO, part of this precipitous drop in gold today was the machinations of the above two heavy hitters in gold derivatives who were running for their financial lives when their SHTF!
JPM alone is responsible for more gold on derivative paper than will be mined in the entire world in the next two years! They couldn't let themselves be more exposed to the tune of many more billions of dollars if the gold price got out of control on the upside. Therefore, they beat it down by hook or crook (not hard to do when you have billions of dollars in the bank).
Somehow, they have to hold the gold price down so they can unload that gold derivative monster without it taking them down with it! But, that will probably take years, as options go waaay out there. They don't have years. With the latest revelations, they may have only weeks before their jig is up?
On the bright side, gold stock volumes were up. A lot of it was being bought by institutional investors. They must know something we don't! They were selling most everything else. Of course, somebody else was also selling hard as prices were down 5-25% across the board, even for the strongest stocks!
We'll see what happens tomorrow.
I feel your pain, buddy. 12 years in the market and today was the worst day ever for me. Scuse me, while I go put some ice on it. Still, if you invested in gold a year ago, you are still way up. Just not as way up as yesterday.
I think that the gold market is the "Stalingrad" of international finance. If gold breaks out at the wrong moment, many big players will be pummeled and the financial system itself can be in real danger. The real bruising battle of holding down gold price will go on for a while. Anybody who invested in gold will not see easy steady climb like Wall St. bullmarket of 90's, because the enemy will try to fight to the last man. But you could see the quantum leap at some point. This is the all-out WAR. So you need to be more patient.