I try, but cannot over simplify seemingly complex subjects. They are really not that complex... they are only made more obscure by the shear litany of lazy and linear analysis out there.
The RPG (real price of gold) is the number one indicator for the times because in or about 2000 we blew off into a secular phase of economic contraction.
The recent gold miner agony could only be interpreted as opportunity if one interprets the yellow shaded areas on the chart above as merely being bullish consolidations in the various measures of the RPG.
Months ago I did not expect we would see the likes of the 2008 opportunity again but yet, here it has come. You use hidden road maps like the pretty chart above to know what you are doing and why you are doing it. Otherwise it's all just nominal chart reading or fundamental dogma.
If Dear (monetary) Leader is able to break down the RPG and paint a healthy economy with no inflation the RPG will break down and break the fundamentals of the gold mining industry. If Dear (monetary) Leader is just a Wizard pumping smoke from behind a curtain the RPG will rise again, the economic contraction will continue and gold mining (the quality ones, not the scams!) is going to be the place to be.
You tell me what the chart above is saying; has the consolidation out of last summer broken the RPG? I think not. And yet, the running of the gold bulls has taken on a life of its own as a sentiment and momentum inspired correction got the margin clerks calling and the black boxes humming.