"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


Wednesday, May 11, 2011

XAU needs to find support very soon

The large cap mining stocks continue to get obliterated as evidenced by the XAU which is now perched precariously above a critical support level on the weekly chart. The entirety of the gains of 2011 have now been erased by this continued ratio spread trade which will not let up.

To give you an idea of how obscene this trade has become, when the XAU was trading at today's levels back in January of this year, gold was trading in the low $1300's!

What is astonishing is the silence of far too many mining company CEO's while their stock value is getting systematically destroyed. A bounce in the metals should bring some valued based buying into the mining shares particularly at these levels. 


  1. Dan - I enjoy your articles very much. Your comment about the CEO's not speaking up is very true. It also could have been said about the CEO's not going on the offensive about the silver/gold price suppression for very many years running. My belief is that one CEO acting on his own would fear government, banking cartel or market retribution. Most recently, in a departure from the norm, upper management from ECU Silver Mining has gone pubiic with their concerns about stock price suppression. Unless they speak out as a group, I think the CEO's fear permitting issues, EPA or OSHA violations, increased taxes on the mining sector, etc.

  2. Things might change in a hurry if one or more large mining companies decided to offer physical gold as a dividend. The logistics probably are a nightmare, but I don't think it's necessary to actually deliver tiny amounts of gold to everybody. A "paper credit" for gold in something (e.g., Sprott, GoldMoney, Perth Mint) that credibly is backed by 100% secure physical metal and regularly audited would be okay for me.


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