General Mining vs. Gold Mining

Metals & Mining SPDR vs. Gold Mining

XME includes base and precious metals miners and also service centers and other related businesses. It’s a broad view of mining with a bias toward steel last time I checked (last year sometime).

What more proof do you need of the gold miners’ relative counter-cyclicality than the XME/GDX ratio? When inflationary operations by Central Banks and governments start to work toward desired goals (ref. 2009 and 2020) the gold miners are as I have called them quite often, “nothing special (at best)”. That is why when gold stock obsessed analysts make calls to buy gold miners for inflation protection a neon sign flashing PROMOTER! could rightly go off in your head.

This is currently another (indirect) inflation indicator liable to pull back during a gold stock bounce that was indeed led by FNV as projected on April 1.

Markets are on a clear plan for the short-term, but a different one beyond the next few weeks. Too many details here for a public post but if and when this ratio pulls back appreciably you may do well to again tune out gold bugs pimping inflation. They are getting back on the tout, and they’ll probably still be touting when an unhealthy macro backdrop for the gold miners resumes, assuming current larger macro trends hold up.

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