Bargains of the millennia? You decide with everything half price and more!

With gold now below its weighted average cash cost and rapidly approaching its marginal cash cost (see chart below) cnsolidation is likely to be kicked off in earnest over the next several months so choose your picks carefully – low EV/Reserves base measures and cash backed balance sheets will be top of our pick list and ABG is the pick amongst the pack to us hovering just over 100p (the “squid” got that one right!))

Of course when supply restrictions hit, the price of the metal will begin its ascent once more. 

The financial world is intensely bearish on precious metals right now and they are largely all on one side of the boat on this trade. Savvy investors should consider taking a contrarian position here remembering that boats always tip on the side with the most people… Soon enough shorts and gold buyers will not be able to find sellers of physical gold to meet demand, certainly given the costs profile detailed in the chart above.

A change in market psyche will likely trigger a massive rally as the excessive short positions are forced to cover on an asset they thought was a sure loser. Make sure your positioned appropriately.