Saturday, 16 February 2013

Gold Miners hit rock bottom relative to gold

A graph says more than a thousand words: Gold Miners hit rock bottom relative to gold.

HUI Gold ratio since  Jan 2008 (graph updated on Apr 05, 2013)

On April 3, the HUI gold miners index slid to 20.76% of the gold price, thereby equaling the lowest ratio we witnessed in the midst of the autumn 2008 financial crisis. A continuous period of lower miner valuations ended mid January 2002 at the very wake of the gold bull market.

Even in absolute terms, the gold miners index now is considerably below its May 2012 level. This third leg down of the triple bottom has obliterated all gains from the September 2012 recovery. And if you might think miners can't get any lower: drilling ever deeper holes is part of their core business.

The HUI/Gold ratio (daily observations over a 6 months time horizon) is monitored on a blog page updated weekly.

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