Its Over, page-13150

My gold newsletter keeps raising excuses for why Gold stocks keep failing. This time it is because of the lower oil price and hence general commodity downturn.

I have been saying for a long time now, Gold equities is not to be equated with Physical Gold during the bear phase. Gold stocks are not performing as well as the physical Gold itself because of company specific issues, relating to production not meeting guidance due to labour shortages, higher production costs due to higher input costs (oil. labour) and disruptions to operations not foreseen and of course gold equities are deemed equities and get punished alongside declining equities. Gold projects which were previously viable before stagflation may run the risk of not getting off the ground, e.g not being able to get enough funding or could resort to more dilutive CR exercise which won't serve its stock price in the interim.

But a newsletter must stay true to shares , otherwise why would it justify anyone paying subscription, right?

My message earlier on was clear, stay out of everything equities until the slow train wreck comes to a halt. Small losses can become bigger losses and short term trading can be a mugs game (you will get caught and blindsided too easy).

Now looking at the 1 year and 5 year chart of XGD, it is precariously close to breaching major support and if we get $1800-1815, we may well get that tomorrow. GDX is also close to breaching major support and GDXJ has already done so marginally. Futures showing both down at this point.  

Gold equities will be collateral damage if and when we get a systemic event of sorts. Even Gold will get dragged but somewhat a lot less. But AUD Gold (physical/digital) won't - you just have to look at what XAU (AUD Gold) did during the Covid crash- at worse point , a fall of just 10.5% from 2 March 20 to 16 March 20. And since that Covid low, it has been up 22.9%. XGD in contrast is just higher by 5.2% from that 16 March 20 Covid lows. This because AUD falls hard during Risk Off (a proven and a given).

1 year then 5 year view
XGD Index Charts and Quotes — TradingView

1 year then 5 year view
GDX Stock Fund Price and Chart — AMEX:GDX — TradingView

1 year then 5 year view
GDXJ Stock Fund Price and Chart — AMEX:GDXJ — TradingView

5 year view
XAUUSD Chart — Gold Spot US Dollar Price — TradingView