On this forum, most posters seem to complain endlessly that movements in POG do not translate through to their equity equivalents.
I also do not diasgaree that "there has been a strong correlation (about 80%) between the S&P Gold Index and the POG for the last 12 years UNTIL the last couple of months".
But, I am also talking about the here and now (ie: since gold moved to and above the $300 mark). Your own comments seemingly support this contention given that the strong equity correlation has been in evidence "for the last 12 years UNTIL the last couple of months".
I was, therefore, merely pointing out that some of the current lack of translation may have something to do with some of the drivers associated with determining the current price of gold. Fundamentals and strategic re-alignment are one thing. A flight to fear is another. On this score, the fear factor must definitely account for a substantial portion of the movement above $300. That said, possibly without the fear factor built in, gold could well still be trading at the $320 -330 range. If so, I would then suspect that the POG:GEQ (ie: S&P GIX) correlation would be a lot stronger.
If not, then why is it that Australian gold stocks do not seem to reflect the changing price of gold?
And, yes, I might just go off and do that regression analysis.
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