I stand by some of my recent postings where I argued the proposition that 80% of the momentum movement in gold can be attributed to the fear factor, or a "flight to fear". If not, then how can one explain that the release of an unauthenticated tape-recording can drive up the price of gold?
This is not to say that the underlying price of gold will not increase (ie: the 20% factor) due to economic cnsiderations, physical demand, preferred store of value for some (etc). But anyone who thinks that the correlation between POG and GEQ (gold equity) should be 1:1 needs to think again.
The actual correlation is much closer to the 20% factor than to anything else.
On that basis, my radar is more attuned to the 1:5 correlation (or thereabouts), than to the 1:1 correlation.
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