The HUI/Gold ratio (HGR, precious metals ‘internals’ indicator) is still completely on trend after a not unexpected rough day for the precious metals. It is interesting to me that the gold miners went up with inflation trades like commodities (DBC took a similar hit today) in general and oil in particular, and are getting whacked in very similar fashion.
I do not like this as a purist gold bug but what can ya do? Inflationists gonna herd and the miners gonna go up for reasons that will probably get punished when the inflation stuff gets punished for real. So I for one am not going to tolerate a breakdown in the HUI/Gold ratio because I do not have a fully engaged macro fundamental backdrop in support of such tolerance.
In holding the daily chart’s EMA 20 HGR has not done anything it has not done fairly routinely all the way up from February. As long as that remains the case I don’t see why the rally would not resume before long. But if it breaks trend, even for a test of the 50 day average (blue) then it could get rougher. When the inflation trades finally end, either sooner or later, expect the miners to get hit as well since the inflationist bugs are all over them now.