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In Spite of all the angst in the Miners and the scary looking charts
Papa Gold looks really Good !
This could be because the MINERS got way ahead of themselves rising 200% on average while Gold rose 30%
in the first 8 months of the year
Weekly
Daily
Me thinks anticipated earnings have a stronger influence on share price than actual.
Washer…that has nothing at all to do with the weekly Gold Chart which is the topic of this post
Well excuuuuuuse me.
The miners were mentioned twice in your post.
Sorry Washer…you ae right…must be some bad chili here
My apologies my friend
No worries. 🙂
Fully, sometimes you also put together interesting charts of the stock market and gold or gold stocks. As you note, there is in some recent periods an apparent surprisingly strong correlation. I wonder whether any of the advance in the gold stocks’ prices is paralleled by advances in the stock market at large?
In other words, how much of the PM stocks’ movements has been associated w/ their being **stocks** rather than w/ their being associated w/ **PMs**.
It would be interesting to see a chart or charts with, all together
(1) gold
(2) stocks at large (SPX, RUT, something like that)
(3) HUI or some other PM stock index.
How much do they all move together (or not)? There’s a non-chart way of doing it:
Someone with a basic (and I mean very basic) knowledge of statistics (that would exclude me unless I were to review the basics) could do it another way, one that has been pretty standard since many years ago in other quarters. For a given unit time (let’s say day’s difference) you see the difference in each of the three: e.g., HUI day1 minus HUI day 0. You enter into your spreadsheet these three daily differences along with a 4th daily difference, which would be difference in date, or difference in trading day, which would be a 4th variable.
Au (day N+1) – Au (day N)
SPX (day N+1) – Au (day N)
HUI (day N+1 – Au (day N)
trading day number (day N+1) – (day N)
Then you see* how the four variables correlate over the entire period, or over a part of the period you’re interested in. How much do daily PM stock price changes correlate w/ gold price changes and how much do they correlate w/ stock market price changes? Strongly positive with both? Not very much with either? Negative with one, positive w/ another? etc.
You can also offset one set of data (let’s say PM stocks’ day-to-day differences) by, e.g., 1 day to make a 5th variable. (It would be HUI day2 – HUI day1). See how well the Au price change and the SPX price change from the day before as well as the PM stock change from the day before predict the 5th variable, which is the following day’s PM stock price change. And so forth.
I used to play with this sort of stuff. I never got too far with doing anything *useful* with it, but it was entertaining. Hours of nerdly fun. I think it is may be some of the most basic bread+butter analysis for the big trading houses and other pros since decades ago though, seeing what happens to be correlating with what and to what degree.
(* I believe one would use a standard multivariate regression formula, but I may be making a gross error in suggesting the appropriateness of this procedure or the name since I haven’t looked at this stuff for years. It would probably available on Excel, not just statistical software. You look up something in your spreadsheet that calculates how multiple things correlate over time, and look up the assumptions needed to use the formula legitimately. Obviously I’m not looking it up now.)
Hope I’ve not been too garbled or verbose. In any case, it would be interesting to see how much the gold stocks acted like stocks, how much they acted like gold, how much they didn’t act like either–whether by chart or by statistical analysis of per-unit-change.
I would love to see something like that researched
This is way above my pay grade however
PM Stocks and the Dow et all are presently joined at the hip for sure
They are serving 2 masters for now and sometimes Gold Holds up but the Dow falters taking HUI with it