Goldtent TA Paradise

Why so little relationship between a positive move in GOLD and a move in the PM stocks???

1. Nautilus says:

   February 26, 2020 - 1:56 pm at 1:56 pm

   The $hui:$gold ratio has been in a downtrend since 1995 (hasn’t made a higher high).

   The weekly chart for the ratio looks ok, but despite $gold hitting new multiyear highs, the ratio is still no where near its 2016 peak.

   This is how every other rally has played out over the last 25 years. The 2008 market crash is what prevented the miners from making a higher high vs gold the last time. Will this time be different?

   The GDX:GLD chart looks a little better, but it also is nowhere near the 2016 high.

   So far the people who say miners are not worth the risk have been 100% correct. We will only know in hindsight, but as for now, history is repeating.

   • North says:

     February 26, 2020 - 2:13 pm at 2:13 pm

     It seems to be getting worse as we go along. I know in the early 2000s bull market there was a closer relationship. Today for example, when GOLD was down six dollars, the stocks were doing better than they are now when Gold is only down 9 cents. That is strange. Anyway, it is what it is. Thanks for your input.

     • Nautilus says:

       February 26, 2020 - 2:27 pm at 2:27 pm

       The last two months have been particularly excruciating. The ratio is actually down despite gold making a moonshot.

       But the weekly chart for GDX:GLD is still bullish looking and is trending upwards in terms of the moving averages and is maintaing support, for now at least.

       That’s why you have to wonder what happens when gold finally has a multiweek correction. Somethings gotta give.

     • Nautilus says:

       February 26, 2020 - 2:48 pm at 2:48 pm

       I notice that SILJ is lower now that silver has come back to slightly positive. People are panicking IMO and probably switching into gold miners, and honestly I can’t say I blame them. The silver miners have been an absolute dud for 4 years.

2. Atomic says:

   February 26, 2020 - 2:12 pm at 2:12 pm

   CB servitude until further notice…

   • North says:

     February 26, 2020 - 2:14 pm at 2:14 pm

     That could very well be, Atomic. I am getting the idea that they can control the stock prices more readily than they can the price of the metals. What do you think?

     • Atomic says:

       February 26, 2020 - 2:20 pm at 2:20 pm

       After all who buys/sells and regulates their product…

   • JSKauai says:

     February 26, 2020 - 2:34 pm at 2:34 pm

     CBs playing Al Gore Rhythms

3. Atomic says:

   February 26, 2020 - 2:18 pm at 2:18 pm

   Agreed…the Miners are beholding to the bankers more than the shareholder in my opinion…

   • North says:

     February 26, 2020 - 2:31 pm at 2:31 pm

     Bottom line is that something fishy is going on. Thanks for your opinion, Atomic.

4. Nautilus says:

   February 26, 2020 - 2:42 pm at 2:42 pm

   look at SILJ, It has been smashed for two months now (while gold has been up huge and even silver is flat to slightly higher). This last couple of days in particular have been very ugly and have just set the stage for a further decline.

   All silver miner investors have in the very short term is hope, and the gold miners continue their relative massive outperformance (since 2016!).

5. Karl says:

   February 26, 2020 - 3:10 pm at 3:10 pm

   It is good to want to know what is causing what. I wonder myself. I suspect a complicated mix of intended and unintended actions by diverse agents.

   Nevertheless what I suspect comes down to–

   Prices of gold and good gold stocks are going to go up in the longer run. It will be an unpleasant, spiky ride all the way up probably with no clear signage what to do at the end (assuming one is still alive). The ride with silver will be less sure, wilder. Many stocks allow for exposure to gold and silver.

   Gold stocks are a diverse bunch. It’s not just explorecos vs miners (or royalty companies). In each category there are matters of how competent the management is, whether they have adequate financing, how good the properties are, and so forth. It can be hard to generalize correctly.

   It will be a pain. Some of us may get quite wealthy if not taxed too much.

6. pedro_deleon says:

   February 26, 2020 - 3:11 pm at 3:11 pm

   In a deleveraging cycle, gold can’t go broke.
   That cycle seems to be getting closer.

   • Karl says:

     February 26, 2020 - 4:21 pm at 4:21 pm

     1st sentence correct. 2nd sentence likely too (as your cautious word “seems” suggests), I think.

     Some mining companies can go broke with widespread deleveraging depending on their particular circumstances. Others can flourish.

     The authorities can cause all sorts of smoke-and-mirror distortions of appearances of pricings and even, at least transiently, affect overall net system economic activity (profitability not so much) with fiat creation and extreme versions of their usual interventions. Nevertheless a deleveraging can be hard if not impossible for them to prevent for long — the masking notwithstanding.

     Silver won’t go broke, but its pricing can be less dependable, less predictable than gold’s.

     (My perspective anyway.)

7. Atomic says:

   February 26, 2020 - 3:13 pm at 3:13 pm

   Eventually AU/AG will be unleashed to combat deflation…

   • North says:

     February 26, 2020 - 3:14 pm at 3:14 pm

     Gotta stay alive to see the turn around. 🙂