Category Archives: Gold Stock Indicator

Gold Stocks: Hedge Free

We have been quoted here on many occasions saying that when the general equity market takes a dive of –10% or more, so too does gold stocks by a greater margin.  Our point, gold stocks are not a hedge from general market drops.

In our September 24, 2014 article titled “Gold Stocks: Risks and Remedies” we highlighted the numerous instances from 1939 to 2011 of when the Dow declined by more than -10% and showed how either the Barron’s Gold Mining Index or the Philadelphia Gold & Silver Stock Index declined by a greater percentage.

In the recent decline of the DJIA from January 26, 2018 to February 8, 2018, the index declined –10.36%.  So how much did the Philadelphia Gold & Silver Stock Index (XAU) decline?  The XAU declined –11.57%.


In the chart above, we have excluded the decline of –14.75% from January 24, 2018 to February 9, 2018 in the XAU index.  Add this to the growing list of instances of when the DJIA declines more than –10% and gold stocks also decline by a greater percentage.

Gold Stock Indicator: January 2018

On September 17, 2017, we said the following:

“We’re still in the diabolical no-man’s land where, according to Dow Theory, the previous trend (bear market) is in place until proven otherwise.”

The price of gold continues to confound even the most bullish gold analyst.  However, as we can see below, it is make-or-break time for the precious metal.

Gold Stock Indicator: December 2017

Below is the updated Gold Stock Indicator as of December 28, 2017:

Gold Stock Indicator: October 2017

Below is the updated Gold Stock Indicator as of October 31, 2017:

Gold Stock Indicator: August 2017

Gold and gold stocks are really dragging it out.  There may be a recovery on the horizon but you wouldn’t know it from the lackluster performance in the face of Bitcoin going parabolic and daily geopolitical machinations.