There remains very strong interest in the gold ETF's, interest which I might add is aiding the strength in the metal; however, this interest is a double-edged sword as the ETF's continue to siphon off money flows that would have, in times past, found their way into the mining shares. The result - continued underperformance by the mining shares in general against the price of gold bullion.
Notice from the chart that with a bit more than a month to go in the year, the HUI to gold ratio is sinking back down towards its recent lows and looks to finish the year on a very sour note.
Back in July of this year, the MONTHLY CLOSING price of this ratio was the lowest close for any month going all the way back to January 2002. Even the two spike lows that occurred during the worst of the credit crisis, which erupted in the summer of 2008, managed to see those two months recover well off their worst levels and close higher than this year's July close.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
Trader Dan's Work is NOW AVAILABLE AT WWW.TRADERDAN.NET