I see the HUI was only down 1.47 points to 340.45 last night. Quite bullish and pretty much ignored the managed take down in gold which lost over US$10 in a matter of minutes.
So what about our XGD? It's currently down over 1%. It underperforms on the way up and outperforms on the way down.
The rationalisation for the recent abysmal performance of our gold index compared to the HUI gold index is that the Aussie gold price determines the price of our gold equities.
It follows then that when gold was at a record AUD1500 earlier this year our gold index should have been at record highs. Was it? NO WAY.
It seems to me that on a pro rata basis Australian institutions are even less inclined to invest in gold equities than their American counter parts.
