If you're an international fund manager and you want to hold an Australian goldminer, you have few investment options apart from Newcrest.
So, when it comes time to take your money out and move on, Newcrest's share price gets trashed. For Newcrest shareholders, this was the week they took an unwelcome cold shower, with the value of their holdings hitting multi-year lows.
Even though the gold price has gained ground over the past few days, as investor sentiment on the efficacy of the US Fed's liquidity program has waned — helping to push gold clear of $US1400 an ounce — Newcrest has been punished.
Its management is seen as having been too slow to cut costs following the downturn in the gold price, and has been punished as a result. It is not alone, with Canada's Barrick Gold the other large local player that is also under pressure.
With an all-in production cost of about $US1100 a tonne for Australia-Pacific, which is being artificially held down by its Porgera mine in PNG - a cheaper producer than its Kanowna Belle mine in Western Australia - Barrick has began cutting jobs in the west over the past few days.
Barrick's Porgera mine, for example, produces about 120,000 ounces a quarter, with a cash cost of $US934 an ounce, benefiting from the processing of lower-cost stockpiles. This mine alone will account for about a quarter of Barrick's planned Australia-Pacific output of 1.7 million to 1.85 million ounces of gold this year.
The big North American goldminers such as Goldcorp, Barrick and Newmont have seen a handy pick-up in their share prices from April-May lows, rallying 10 to 15 per cent.
And despite the gloom and doom among local goldminers, some investors are willing to commit fresh funds for promising plays.
Take Indochine, a minnow that has ambitions of developing the Mt Kare gold deposit in PNG. It raised another $4 million this week in a placement at a premium to its share price. For any miner, let alone a gold explorer, getting a placement away at a premium takes some doing, especially in the present market.
Part of the residual interest in the stock is in a prospective corporate play if its reserves and mine plans firm up.
Similarly, there is investor interest in Gryphon Minerals which wants to develop a project in West Africa.
With more than $60 million cash on hand, it is well positioned to fund its proposed $200 million-plus project, but few investors are willing to look too closely until plans progress.
Gold bulls continue to call for a short-covering rally to push gold to fresh highs in the months ahead. But their optimism is belied by the view that gold is a store of value in times of inflation.
With the rampant deflationary forces unleashed on the global economy, this may continue to test the optimism of the bulls.