Despite the continuing surge in the gold price the HUI finished down 1.75 points at 300.10 and the XAU down 1.48 points at 124.01.
In the face of weak general equity markets more and more investors will latch on to the fact that gold shares are the only place to be in equities should gold shares fly and start to reflect the value of gold companies' assets which of course is gold.
So in today's hypocrytical world of "free markets" that are consistently rigged it has been decided that this is not in our interests. We should all remain invested in stocks with bleak prospects such as financials.
Heaven help us if investors should even dare contemplate selling financials to buy gold equities.
This is what Dan Norcini had to say about action in the gold shares:
"The fly in the gold ointment however is once again, the mining shares which were whacked well off their session highs in a near perfect copy of Monday’s performance.
The battle for 310 in the HUI and 127 in the XAU is quite fierce as the trapped shorts seem to be literally mounting a life or death defense of those levels. So far the bulls simply cannot dislodge them from their lairs but the day is not done yet and the longs are also showing some mettle for a change as they push the indices back up off the session lows.
A strong closing breach of those levels, especially coming at the end of the week and thus painting a very strong showing on the weekly price charts, is something that the shorts are desperately trying to prevent.
They know that a technical breakout will bring even more money into the gold shares which will overwhelm them and that is the reason we are seeing such fierce opposition coming in near those levels.
I am sure that they are quite concerned about the reported record inflows in the largest gold ETF – GLD. That is why observing this kind of fierce and determined selling in the face of what is evidently a significant move into all things gold is so noteworthy.
Just who sells like this and does so in such huge size when the path of least resistance is up?"
