gold shares set to run hard ..., page-32

"One more point that I should have made (silly of me to have forgotten, in the midst of technical arguments), is that Bruce's graphic actually proves exactly the opposite of his point!

You see, if the BGMI/Gold started at 1.0 in 1960 and then rose and fell until the blow-off 1980 spike in the gold price, it means that for the entire 20 year period, equities outperformed physical gold!!!!

It was only right at the end - when gold had its huge spike - that the gold price actually temporarily caught up to the equities."

TheWord the facts are that when gold was floated in 71 the Ratio was 4 and in 81 at the end of the chart the ratio was less than ~1.8 in that period the gold price went from 35/oz to 850 a 2400% rise. The Barrons gold index increased by approximately 1000% during this time (10 bagged) gold equities underperformed gold when it floated freely. So lets project this performance forward to the current gold bull market the HUI bottomed around 35 in late 2000 and is now around 400 say a 11 times rise. In the same time period gold has risen from 250 to 800 a 3.2 times rise, so lets say gold repeats its performance of the 70s and increases 24 times to $6000 usd an ounce and say I be nice and accept that in 1960 the ratio was 1-1 and in 1981 at the peak it was around 1.8 1 we could well expect a further 4300% rise in the hui on that basis so on an historical basis it could 4 bag from here while physical could expect to increase by 7.5 times. My question is given the historical performance from the 70s what is the fact that the HUI has shown no leverage for the last 3 years telling you? it tells me that on it shouldn't and won't show any leverage even if physical gold screams to $6000 oz. If you feel I am being stingy using a 24 times rise in the price of gold as the basis of my calculations by all means let me know but before you do ask yourself the question do you think that gold was undervalued more in 1971 after having its price fixed since the 30s or in 2000? I guess my point is the big money in gold shares was made between 2001 and 2004 and going on historical data I imagine that even if gold continues to climb, I will still be hearing the cry "my goldies just aren't moving with the physical whats wrong" for years to come mainly because the myth of gold equity outperformance has been so built up by the gold writers and promoters on forums like this.