Hinde Capital: “Gold Is Trading At 75% of Its Production Cost—That Has Never Happened”
By Tekoa Da Silva
Tuesday, 23 July 2013
Despite a lacklustre summer for precious metals and mining equities, both groups moved up very strongly this week. In response, Mark Mahaffey, Co-Founder of Hinde Capital and Co-Manager of the Hinde Gold Fund, was kind enough to share comments on the short and long-term view of the market.
Here are his interview comments with Bull Market Thinking’s Tekoa Da Silva:
Tekoa Da Silva: Mark, you might be the only person out there speaking towards what you describe as the ‘speculative cycle’—reflecting a potential top in the equities market, along with a potential bottom in gold. You’ve described this cycle in your most recent blog piece entitled, “Where has all the gold gone?” Can you share those thoughts with our readers?
Mark Mahaffey: That is the right word, “potential”. There are some signs in the market that suggest the high level of speculator longs in US equities and the low level of speculator longs in the gold market should have people concerned that this trend has just about run its course.
The sentiment cycle never changes; at the top, total confidence, delusion and irrational exuberance gives way to hope, anxiety, panic, despair and total disgust at the lows. That’s when valuations would suggest the reverse.
TD: Is that what we saw yesterday Mark, the first step in the process of a reversal in that cycle?