This type of move in the gold price would traditionally rally the HUI Gold Stock Index from +10% to 15% in a normal market. But, given the market is now re-testing the October-December lows, the move in gold stocks while positive, is still somewhat muted.
The HUI gold bugs index is very undervalued to the price of gold. And once the broad market finds a bottom, the gold shares are technically poised for a run to test HUI 370 to 400.
Here is the present “valuation gap” between the price of gold and gold stocks:
If the broad market can find a bottom here, gold shares are potentially a coiled spring.
SliderOnTheBlack
1 response so far ↓
1 mikemo // Jan 23, 2009 at 12:39 pm
Nice chart. I picked up some MFN yesterday under $4 and GSS at $1.06.
Ready to roll…
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