Gold Shares: Subtle Changes Within The Trend Suggest Outcome Few Expect

Yesterday Dan's commentary and charts on jsmineset.com illustrated the under performance and out performance of the mining shares relative to bullion and stock market, respectively.

I would also like to add this analysis by illustrating the building strength within the gold shares group not captured by the widely followed indices such as the XAU and HUI (Huey).

The Gold Miner's Index has decisively broken out of its cup-and-handle formation. This breakout brings a minimum measured move into play.

Gold Miners Index ETF (GDX):


The junior miners, a subset within the mining group, are displaying exceptional relative strength to majors (major producers). This relative strength is revealed by the surge in the juniors to majors gold share ratio illustrated below.

Juniors to Majors Gold Share Ratio:


All of this positive action is supported by the long-term secular breakout of the gold stocks from the 30-year consolidation. Money flows into the gold shares will only intensify as recognition of the significance of this breakout increases.

S&P Gold (Formerly Precious Metals Mining)*
*S&P Gold from 1945, Barron's Gold Stock Index from 1939-1945, 1922-1939 Homestake Mining


Watch long-term, relative money flows closely. The subtle changes within the trend already suggest a peformance outcome that few expect.

S&P Gold (Formerly Precious Metals Mining)* to Gold Ratio:
* S&P Gold from 1945, Barron's Gold Stock Index from 1939-1945, 1922-1939 Homestake Mining