Hi all, I've read a few comments over the last few weeks along the lines of the rise of PRU being de-coupled from the gold price and XGD, but on the other hand also comments directly linking every daily and projected future movements tightly to the POG. I mentioned in a previous post how I don't often look at gold stocks so it's a given that I'm no gold expert, so these types of conflicting comments got me interested in checking out what it looks like on a chart.
Below for a bit of infotainment is a performance comparison over the last 6 months of PRU vs the (USD)POG, the (Aussie)XGD and a couple of other ASX gold stocks- EVN and SAR. (EVN because it seems to be on everyone's gold watchlist, and SAR because it's the only other gold stock I've bought and it was nice to me earlier this year.)
I've drawn a heap of grey vertical lines to help anyone interested in looking at this more closely, but what jumps out immediately is how PRU (purple) has out-performed and dramatically diverged from the XGD (black line) by making higher highs and higher lows while the XGD makes lower highs and lower lows. This divergence began precisely on the 14th of October. But that's not the interesting part. The interesting thing to me is looking at how this has developed.
There's only two periods of trading (shaded red on the chart) where the price of PRU went in the
opposite direction to the XGD and these were both only 4 days duration. Apart from another handful of single trading days, the price of PRU has followed the same
direction as the POG and XGD every single day- except for those two 4 day periods. But PRU is often seeing larger percentage gains than the XGD on up days, but on the down days only dropping the same or less. So it's not exactly de-coupled from the POG or XGD- more like it's got higher positive beta for up moves and a beta of about 1 for down moves.
Hmmm, not sure how useful this is but I guess it makes spotting a change in behaviour a little easier. Anyway, like I said I just wanted to have a look and thought I'd share it here for anyone interested. I did the chart yesterday so doesn't have today's bar, which by the way continued true to recent behaviour- XGD up 2.72% and PRU up 3.03%. Have a good day tomorrow and enjoy the break!
(20min delay)