via AdvisorPerspectives - A Win-Win Case For The Bull Market In Gold

A very good, timely article on bul market considerations in gold from Martin Pring outlines the negative real interest rate case for gold price advances. Over streaming companies in the gold space, you would not ignore gold mines as the yielding asset.  There are very few startup gold mining companies with a large asset that have raised sufficient capital, and are difficult to ascertain given the drill hole results regularily thrown at invetors who want nothing more than a quick flip.

Notable to the discussion is the marked differences between periods of interest rates falling below inflation, and periods when gold prices lagged.  The outcome of all periods in this article, which assumes a fixed purchasing power is 8.9%. Thus in the best case scenario, you would not exceed this as a yield in the gold mining apace. 

Why streaming companies would necessarily be better than a gold mining outfit is not explained, just that the yield on the streaming mine may greatly exceed an NSR on a base metals mining project.  If commodities lost their purchasing power, then this streaming yield would be very costly to maintain.  But the gold miner would not see this differntial change dramatically.

http://www.advisorperspectives.com/commentaries/2016/05/18/the-win-win-case-for-a-bull-market-in-gold-part-i

Pring's own indeces are showing a dramatic deflation in commodities, while the stock market makes new highs.

http://schrts.co/jNkQ1p

-F6