A look at the ratio of gold stock prices to both the price of gold and to the S&P 500 shows...

A look at the ratio of gold stock prices to both the price of gold and to the S&P 500 shows just how depressed they are, writes Robert Sinn. A break in the stock market may or may not be good for gold miners, but should be an outstanding catalyst for a reversion to the mean in both ratios, he says.

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Comments (8)
  • TwistTie
    , contributor
    Comments (2429) | Send Message
    Things might revert to their mean, but the time at which they choose to do so is unpredictable.


    The gold miner stocks might actually fall off the bottom of their charts.


    Then what?


    See Sweetie, I can be ridiculous too.
    2 May 2012, 04:19 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
    8-9 months ago several pundits were arguing for the same mean reversion, which never happened...the market factors in sentiment, which has unfortunately not been positive for the miners.
    2 May 2012, 05:30 PM Reply Like
  • sean.parmelee
    , contributor
    Comments (791) | Send Message
    When long-standing inter-market relationships get this far out of whack, something eventually has to give. (Key word being "eventually".) It seems far easier for me to accept that miners are hugely oversold than it is to accept that the big move up in equities that began late last year--which was not followed by miners--is hugely overbought.


    Today was absolutely brutal for miners--likely short-term bottom, although perhaps there is further downside in the mid-term.
    3 May 2012, 04:35 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Got to agree. Miners, as LT play, seem worth the risk-reward at this point. Of course miners could go lower yet, but seems more likely that equities will start declining soon.
    5 May 2012, 12:11 PM Reply Like
    , contributor
    Comments (42) | Send Message
    Miners are neither like gold or Apple; Apple will make as many iPads as they can, yet miners are content to just let it stay in the ground when the cost of digging is too high or the central banks are selling gold(supply). Reversion may be gold coming down (!)....or costs coming down enough to turn on the grinders.
    5 May 2012, 01:40 PM Reply Like
  • Nancy Lucas
    , contributor
    Comments (41) | Send Message
    Sharing pain with other metals investors. :( However, AEM has definitely bounced off the bottom and even GG caught a small bid, Friday. FCX hit, but didn't go through $37. Still, more bouncing along the bottom seems likeliest in May and June, alas. I look to early mid-August for more sustained moves up.
    6 May 2012, 09:36 AM Reply Like
  • Nancy Lucas
    , contributor
    Comments (41) | Send Message
    Oops! Meant to write "FCX hit, but did not go through $36, not $37."
    I should have proof-read more carefully.
    6 May 2012, 10:53 AM Reply Like
    , contributor
    Comment (1) | Send Message
    Shall I sell GDX or wait for better times ?
    7 May 2012, 02:55 AM Reply Like
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