From this morning’s pre-market update:
“Gold and silver are down slightly in pre-US trading. If the gold stocks make a second day in the green we can start to take note, given that gold and silver are nearing reasonable pullback targets.”
Here is HUI vs. Gold at the day’s close…
Gold stocks did not end in the green, but the HUI-Gold ratio did. Okay, so I am starting to take the slightest of note. Gold stocks went down less than gold today. But if the world goes risk ‘ON’, I think there will be better places to be.
So is the world going risk ‘ON’? I just took a look at Junk bonds and Junk bond spreads vs. Treasury and Investment Grade and even there, what do we see? Bounce patterns, very much like what we see going on in beat down markets and stocks.
Something is up here and I have not quite figured out what it is. But it is trying to convince me that risk is either about to go ‘ON’ with a potential party atmosphere over the next few weeks or the whole thing is a giant head fake. We should watch the fledgling breakout in the Russell 2000 (small caps) among others for clues, and that we will.