The bear market logic for miners: Continuation and Analysis
The summer slump for precious metals has turned into a nightmare, with gold breaking below $1100, platinum into the triple digits and silver well below $15. While the July slide is pretty bad, what makes it worse is precious metals setting fresh multi-year lows.
Compared to the plunge among miners however, the precious metals sell-off seems rather meek: the HUI/Gold ratio is threatening to drop below 0.100, which is five times lower than its 2003-08 equilibrium level and over four times lower than where HUI/Gold recovered to in 2009-2010. In May, I drafted an article titled:Gold and the miners: identifying the bear market logic. After the latest sell-off it is worth checking whether the 'bear-market-logic' for the miners still holds.