hi ho .. hi ho .. gold shares are the go imo

What can we say?

Gold is currently US$1414, just US$30 off its all time high while our XGD Gold Index has been correcting since early November.

In recent days, presumably with Japan as the catalyst there has been indiscriminate, panic selling of gold stocks rather than the orderly correction that had been taking place.

In most circumstances this indicates that the correction is nearly over.

Conditions are brilliantly favourable for gold. For example, quantitative easing has gone into overdrive with Japan now injecting massive liquidity into their financial system.

I'm not going to repeat again why gold at this point in time has not gone through the roof, though I as well as many others suspect the usual culprits. Their aim all along has been to kill gold off as the canary in the coal mine. They can also be thanked for the suffering endured by the USA and the rest of the world as a result of the 2008 GFC, which would not have occurred if gold had been allowed to play its traditional, historical role.

However my main point is when a correction enters a panic phase it is usually near an end. Sure there are exceptions - such as the once in a century prolonged panic massacres during the 2008 GFC that remain ingrained in many investors' psyches for years afterwards.

The November 2009 to February 2010 correction in the XGD Gold Index was from 6,543 to 5,058. That was 22.7%. This correction since November has taken the XGD down from 8,448 to today's close of 7064, with a panic sell off of 254 points today. That is a correction of 16.38% - and overall much worse than that in most gold equities.

My money is on this correction being close to over.

Now let's see what happens. Gold is now US$1415.60 as I post.