Goldman Sachs vs Precious Metals Miners
A long term ratio analysis of Goldman Sachs stock vs the XAU Gold and Silver Mining Index reveals that we may be on the doorstep of the next major surge in Gold and Silver mining stocks. This expansion can arrive as soon as January 2019.
2.2 has been a key level in the Goldman Sachs vs XAU ratio since the year 2000. Precious Metals miners began a long term bull market after the ratio dropped from 2.2 in the early 2000s. A double bottom in the ratio at 0.4 was observed in 2008 and 2011, which gave us a measured move target to 4.0 which was met in mid 2015. Another major surge in Precious Metals miners occurred in the first half of 2016, coinciding with another rejection of the GS:$XAU ratio below the key 2.2 level.
This month, December 2018, the ratio is again testing the key 2.2 level. If the ratio falls below 2.2, the Precious Metals miners may experience another bullish expansion, similar to the behavior observed in 2000 and 2016.
Notice the monthly candles of February 2016 and December 2018: both are bearish candles with wicks that test and bounce off the key 2.2 level.
I’m excited to see what 2019 will bring! – Harry
Harry the Super Ratio Man
🙂
Interesting take thanks
Haha thanks Fully!
Ultimately, what happens with PMs from here, will depend on Powell.
Stephen Roach has a piece out today (see ZH 12/26) comparing his ‘pull the pin’ move last week to Volcker in 1980.
That move coincided with gold’s 1980 highs.
Will Powell stand his ground?
When Volker did that, inflation was very high. I knew a man who bought a muni paying 12% interest TAX FREE!