The Gold Report: In September 2014, you told us that investors needed to own bulletproof, low-cost producers that can survive lower gold prices. What is your investment thesis for this point in the bear market?
Christos Doulis: Unfortunately, not much has changed. We certainly do not appear to be in a bull market for gold. All of us would like to see higher prices. They may come at some point in the future but no one knows when that will be. So in the short and medium term, I would continue to recommend owning the lower-cost producers in order to protect oneself from the chances of insolvency.
TGR: What is your technical analysis of the recent performance of gold telling you about what we’re headed for?
CD: I am still negative. When I look at the trend over the last year or so, there’s been quite a bit of volatility, but in general, the highs keep getting lower, and the lows are getting a bit lower as well. For instance, in January 2014 we had a rally that went close to US$1,400 per ounce (US$1,400/oz) before it petered out. Then we had another rally in January of this year when gold got closer to US$1,300/oz, not to that US$1,400/oz level, before it started to give back the gain. If you draw a channel on the gold price, it certainly looks as if we have not reversed course yet. The highs keep getting a bit lower on the volatility, and the lows have been lower. Then again, gold popped US$20/oz in early April. If gold could sustain a rally to US$1,250/oz, I would start feeling a little more enthusiastic about the space.
TGR: What is your prognosis for this bear market?
CD: My personal view is that I’m hoping for higher gold …read more