Gold mining stocks have been outperforming the metal which is a good sign of future gains for gold.
It’s good news for both bullion and equities since price increases in bullion tend to follow those of stocks.
The Philadelphia Gold and Silver Index has gained 21% this year after a loss of 49% last year. The NYSE Arca Gold BUGS Index, which lost 56% last year, went up 22% percent year-to-date.
Bullion, on the other hand, had climbed 11% year-to-date, after last year’s loss of 28%.
Bullion, on the other hand, had climbed 11% year-to-date, after last year’s loss of 28%.
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| Photo: NYSE (HUI) Gold Bugs – 1 Year |
“The gold stocks typically begin rising or falling in advance of the metal, thereby foreshadowing the trend,” said Brien Lundin, editor of Gold Newsletter. “They move further on a percentage basis than the underlying metal, thereby offering leverage.” He also said that “the fact that the gold stocks are outperforming gold so far this year is a very bullish indicator for gold itself.”
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