A weekend reading: Excellent article as usual from Adam Hamilton. Below are few snipets but there are more in the article.
I felt the capitulation when last week while gold price was steady going higher and miners diving to low.
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http://www.321gold.com/editorials/hamilton/hamilton012216.html

…So this week’s abrupt plunge to crazy new secular lows despite flat gold prices felt like a capitulation, which has been long overdue. The gold miners’ stocks are radically undervalued fundamentally, they have been pounded for years technically, and the extreme bearishness long plaguing them couldn’t possibly get any worse sentimentally. Everything is in place for gold stocks to carve a major secular bottom.

…At $1100 even, that’s a 4.8% gold-price rally. Yet it still costs our miner $850 per ounce to produce, while selling that gold at $1100 now yields a $250-per-ounce profit. That’s a 25% increase on less than a 5% increase in gold prices, excellent leverage!
…It turned out that the average cash cost of the GDX gold miners was just $618 per ounce in Q3. That’s their actual cost of production at the mine level. At today’s $1100 gold prices, that implies cash operating profits of $482 per ounce! Such massive 44% margins would be celebrated in any other industry, but they are totally ignored in the gold miners.
..The relentless ongoing gold-stock selling culminated this week in that capitulation day, forcing the HGR down to 0.093x. The HUI was trading at less than 1/10th prevailing gold-price levels! That tied the all-time HGR low from late September 2015. The gold stocks had never traded lower relative to gold, the metal that drives their profits and thus determines this sector’s fundamentally-righteous stock-price levels!
..A 20% gold rally would leave this metal near $1275, in line with year-end targets from some major Wall Street banks. At $1275 gold and the post-panic-average 0.346x HGR, the HUI’s price target would climb over 440. That’s a 340% gain from this week’s capitulation low! And gold stocks’ potential in coming years is even greater than that.

…..All prudent investors and speculators need to have substantial gold-stock exposure in their portfolios. With the gold stocks near fundamentally-absurd 13.5-year secular lows already, the downside risk is trivial. Yet the upside potential is vast