Look! A Gold Turnaround! (Not)
Source: Seeking Alpha, Roland Watson (9/11/08)
...There was a break in the devolution of gold mining stock prices Wednesday...Yesterday, equities popped while bullion pooped. In a volatile session, GLD shares gave up 3%, while GDX gained 3.5%...
The turnaround, if that is what it indeed was, seems long overdue (then again, what isn't overdue in this market?)...
If you like ratios (who doesn't?), take a gander at the action in the gold/oil fraction. Oil's recent sell-off has been even harder, dollarwise, than gold's. An ounce of gold can now buy 7.6 barrels of oil; in June, gold fetched only 6.4 barrels.
So, relatively speaking, gold's stronger than oil and maybe, just maybe, gold stocks are poised to outdo bullion. Does this justify buying gold stocks here? Too early to tell for sure, though some investors might opt to trade the spread, rather than buying stocks or a fund outright.