Things about Gold and Gold Mining Companies

1- Gold Bull Markets are short in time and Gold Bear Markets are much more longer in time. There are always exceptions, but this is the main rule

2- 90% of gold companies who are engaged in mining, processing & production, marketing and selling gold fund their operations using loans from banks and financial institutions

3- So, gold production is mainly financed using debt. And since bull markets are short and bear markets are longer, financing must be made when interest rates are at historic lows or low enough to justify injecting money into gold production

4- When interest rates start to rise, money starts to pull out and little investments are left over in the production proccess

5- When investors buy gold, they know that gold pays no interest and has no dividend to offer them, so they are mainly looking for price appreciation of the instrument itself. In most cases, it's very wise to buy gold or gold companies stocks when interest rates are at the lows, because that's the time where all gold companies start working and start making profits

6- The reason Gold prices and the US Dollar always go in opposite directions is that lower interest rates for the USD is always accompanied by declining stock prices, and people don't want to invest their money in the US stock market or even buy US bonds or open saving accounts,so they have 2 alternatives, either invest overseas, or invest in gold

7- Another reason, people think of gold as an insurance against any unwanted surprises. Many investors and funds use gold stocks as a portfolio hedge, increasing and decreasing the owned percent of gold stocks based on the interest rates and the overall performance of the US stock market