Nov. 7, 2011, 12:07 a.m. EST
Gold shares may (finally) begin to lead
Commentary: Key gold bugs, others say gold stocks’ time has come
By Peter Brimelow, MarketWatch
NEW YORK (MarketWatch) — Are gold shares beginning to lead? Key gold bugs, and other observers, think maybe.
Last week’s turbulent markets ended with the S&P 500 down 2.48% but the CME December gold contract settling up 0.48%. Significantly, the gold shares, as represented by the NYSE Arca Gold Bugs Index, closed the week up 1.37%.
This means the HUI has quite decisively broken above the downtrend in place since the Sept. 8 peak. Perhaps more importantly for the generalist investor, it confirmed a pattern of outperformance against the general stock market which began in the middle of last month.
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On Friday “Trader Dan” Norcini amplified: “Many investors have come to view the sector as generally undervalued, based on the good numbers being reported by several miners and the fact some were raising dividends.”
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Of course, gold shares’ bullishness does assume that the metal itself will go up. Here the omens are reasonably positive. On Monday, the Gartman Letter raised the gold exposure in its model portfolio by 50%. By Friday, this widely followed institutionally heeded source was a stunning 91% invested in various gold plays, mostly hedged into the euro and sterling.
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Full story: http://www.marketwatch.com/story/gold-shares-may-finally-begin-to-lead-2011-11-07?link=MW_popular
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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