get ready to under-perform, page-6

I've been meaning to comment on this one as it has not played out in the same vein as last year. We're comparing last years plunge in AUD and subsequent rise in AUD Gold against the recent rise in AUD and subsequent fall in AUD Gold and expecting the opposite to occur.

The ozzie gold equities didn't follow the $A Gold price to a large extent when it shot higher and I remember many comments at the time that the gold shares where chronically underperforming. Now with the USD price and the HUI/XAU rising, I think many of us thought that, because of last year, the opposite should occur and Aussie gold shares should follow the rise in sentiment in the US. Again, hasn't really happened. They have basically held sway.

I think whats happened is that normally our goldies will follow the AUD gold price. Its just that the sentiment for any risk taking late last year was appalling and hence even though the price screamed higher in AUD, money didn't find its way into gold equities or any equities for that matter. Fundamentally they were screaming buys, but the stock market doesn't run on fundamentals when sentiment is either extreme of the spectrum.

Next time though, I think it might be different, provided we are not in another period of extreme sentiment and wholesale liquidation.