Gold vs Gold Mining Companies

Click on Chart to Enlarge

An interesting divergence is occurring between Gold (as represented by the exchange traded fund GLD) and Gold Mining Stocks (XAU).  They normally follow each other but this has not been the case lately.  If you own mining stocks they have held up better than the stock market generally, but have not participated in the rally in the actual metal.  Howard Ruff, an expert who has followed gold for decades, expects these to eventually converge with the mining stocks rising.  This kind of divergence may also be caused by the decline in other metals that are part of the mining production, or perhaps an overall decline in the demand for gold for industry due to the exceptionally high price.  I have seen the same thing occur with Oil and Oil Companies when the price gets exceptionally high.
-JOHN

BOYDSTRATEGY.COM

If you would like John or Rosemarie Boyd to speak to your group or organization on financial planning or investment strategies contact Rosemarie at rboyd@boydstrategy.com or call her at 508-754-3226. The comments on this blog do not represent individual Investment, Tax or Legal Advice, and do not represent an offer to buy or sell any security. Consult the appropriate professional before acting on any idea seen here.