Gold Mining Stocks May Underperform Bullion: Technical Analysis
This Bloomberg report written by Elizabeth Stanton discusses the reasons why physical gold bullion may outperform mining stocks.
In a nutshell, John Roque, the managing director at WJB Capital Group, told Bloomberg, “gold should do better than gold equities … it doesn’t mean the stocks won’t perform, but they will likely do less well relative to the metal.”.
His technical analysis suggested that gold stocks are near their most expensive level relative to the price of bullion in 14 months, a sign that they may start to underperform the metal, according to WJB Capital Group Inc.
Another reason why the gold futures rose last week is that the Federal Reserve could be expected to trail other central banks in raising interest rates, driving the dollar down and boosting the appeal of haven, gold to investors.
Read the article at www.bloomberg.com/apps/news
Food for thoughts...how would silver, the "cousin" of gold fare in future?