Admitted Gold and Silver are both down a little today, but crude oil and copper (the commodities I follow most closely) cratered by more than 5% to multiyear lows.
I'll leave it to gold-theoridy to explain this, but given the alternative (when gold was correlated closely with crude) what we have now is way better for gold miners than early summer.
The crude oil collapse (and even the base metal price collapse) should be very good for pure gold producers (e.g. open pit heap leach operations) as their costs should fall substantially. Crude helps with equipment fuel costs (including diesel-electric operated mills). Lower base metal prices helps with equipment costs (and maybe even labor costs) as the suppliers of mining equipment and services should be have an oversupply of capacity.
So, you might want to adjust your portfolio (if you haven't already) to weed out precious metal miners with significant base-metal byproduct credits and focus on pure producers. Here's some of the ones I like the most (and own) that fit this category:
Any other good, pure-gold or silver plays you like (don't get me started on Silver Wheaton and Silverstone as I don't consider them pure-precious metal plays because of third-party base metal counter-party risk)? Can these miners go up, in your opinion, even if gold continues to range-trade?
Leave me a comment.