The One Million Dollar Question in the gold space is: ''''When will this bear market end?''''. Or should I say: the One Thousand Ounces of Gold Question?. Because it is not unlikely that One Thousand Ounces of Gold will soon only be worth One Million US Dollar. There are probably more than One Thousand quality articles on the internet about this question.

That is why I am not particularly interested in those articles anymore. People like Rick Rule, Jim Rogers, Eric Sprott, Peter Schiff and in my country Willem Middelkoop have said enough about this topic. I am personally more interested in company specific due diligence with a focus on exploration, development and royalty companies. That is where I normally spend my time on.

For some reason I ended up analysing Newmont Mining today, one of the major gold mining companies - which I tend to avoid. But when I was looking at the chart I noticed something interesting. The longest bear market or share depreciation period Newmont Mining experienced since 1978 was the period 1996 - 2000 (4 years and 5 months from top to bottom). Today, January 23 2016 we are 4 years and 2 months into a bear market (Newmont''s top was on 11-11-11). 

Newmont share performance top to bottom 1996 - 2000: - 77.9%

Newmont share performance top to bottom 2011 - 2015: - 73.9%


It is interesting to note that bear markets in gold equities did not take longer than 5 years when looking at the charts of the last 40 years. I have analyzed the charts of Newmont Mining, Barrick Gold, Hecla Mining, Gold Fields, and Coeur Mining. Most bear markets took 2 or 3 years, except for the bear market of 1996 - 2000.

I will not call the bottom, nor will I write an article about the general gold equities market again. But the similarities in the charts shown above are interesting enough to share and give some hope in difficult times! 


Luc ten Have
January 23, 2016