I’ve increased the ratio of gold stocks to non-gold stocks in the portfolios today. Added were AEM and BTG (to go with GBR.V, MAI.V, GBRR.V, OGN,V, SSRM, WDO.TO and GDX) while a few regular stocks were removed to take profits and limit losses, but also to change the balance. The reason is simply that the broad stock market is at high risk (vs. potential reward) and gold/gold stocks are at low risk (vs. potential reward).
But with Treasury yields still trending up and the inflation trades ongoing, I am not at all sure that this is THE gold stock rally. It does look like a rally of some kind, however.
The GLD/SPY ratio (as noted in an update yesterday) can continue to be a guide when referring back to the spring rally in gold stocks. If it is not the start of a new major bull leg then at such time as GLD/SPY (gold/SPX) may stall out (at the downtrending SMA 200?), there could be hesitation at whatever HUI high is ahead (if recent past is prologue). On the other hand, if GLD/SPY were to take out the SMA 200 and leave it behind if would be a good indication of the next bull leg after the long cleaning the sector has gotten after the summer 2020 bullish blowout.
Let’s also keep in mind the seasonal aspect, which is positive on the average of 30yrs of data.
