Miners relative to gold: Long term charts on HUI

Miners and Gold bullion

There clearly is a good correlation between miners and gold bullion, which doesn't come as a surprise. However, when the much claimed leverage is concerned, it seems to get a bit tricky. There sometimes is upside leverage with miners outperforming a rising gold price. We've also witnessed miners lagging gold in its ascent. Yet invariably, gold retreating implies an ugly decline for gold miners. 

Gold miners: three decades for naught

The Philadelphia gold and silver mining index (ticker symbol XAU) has been around since Jan 19, 1979, initiated at 100 with gold quoting $230.5. Fast forward to 2015 January 22: Gold topped $1302 (after the long anticipated QE-bazooka by the ECB), while the XAU closed at 81.12. Even though revenues per ounce are more than fivefold higher, the mining index lost 18.88% in 36 years.