daytrading sep 5 pre-market, page-5

For the brave we have the ever widening gap between physical gold and the gold miners and explorers.

Theory suggests that the gap will close which means that if gold holds it's highs the miners will move sharply upward at some stage.

Caveat being "The market can remain irrational longer than you can remain solvent"

The most recent occurrence of this was back in 2010 when in May physical gold moved from the 1100 to 1300 AUD range to the 1300 to 1500 AUD range, but the XGD didn't move to a higher range until September.

What I am putting this down to is larger entities waiting for the higher price of gold to appear in quarterly reports before buying in.

If we apply that rule to this situation; we may not see an increase in the XGD until perhaps October November when the rise in the POG is actually seen in the bottom line of producers.

So yes the Gold miners show opportunity - but you may find the wait for them to lift out of their range interminably depressing and frustrating.

The gap is so much larger now I would like to see it close earlier - but the gap has been apparent for a while and still hasn't closed despite the HUI making a new high on Friday night. Perhaps it won't until the market is given some data from the miners themselves to trigger higher interest.