In and around the August time frame we noted (in NFTRH) high risk to the gold miners because the price of HUI had gotten a million miles ahead of gold’s ratio to the stock market. That was typical bit in the mouth enthusiasm by the gold “community”, as even Warren Buffett bought a gold stock (and signaled a top).
This chart (and another I have like it) revealed to us in real time the excessive condition. Could the miners have just kept going, into a bubble of their own? Sure, but very unlikely. Amid the bubble making elsewhere gold, silver and the miners are doing the right thing… and they are doing nothing that they did not do several times in the bull market circa 2001-2007. Those bull market grinds were interminable, but ultimately gave way to grand new highs when the healthy corrective work was complete.
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