The gold market is generally weak relative to the industrial metals markets during the boom phase of the inflation - fueled, central - bank - sponsored boom / bust cycle and strong relative to the industrial metals markets during
the bust phase of the cycle.
That is not a big problem in the boom phase of the financial cycle, because those same measures help to avoid a loss of liquidity and credit availability in
the bust phase of the cycle.
Not exact matches
But now it looks like we're heading into a different
phase of the typical boom - and -
bust cycle for miners.
A business
cycle consists
of a repetition
of four
phases — expansion, peak, contraction, and trough — that is often called the boom - and -
bust cycle.
The optimal portfolio would be long during the boom
phase of the credit
cycle, and short during the
bust phase.
My point is this: in the
bust phase of the economic
cycle, it is normal for those that have not planned prudently, keeping debts down, and leaving enough in reserve, to be scared.