• 3 hours Russian Central Bank Eyes Gold-Backed Crypto
  • 9 hours Alberta’s Unlikely Alliance With The Nuclear Industry
  • 1 day The True Cost Of Opportunity In America
  • 1 day Why Investors Shouldn't Ignore Gold Stocks
  • 2 days Facebook Scrubs Over 2 Billion Fake Accounts
  • 2 days Dow Scrambles To Avoid Fifth Straight Weekly Loss
  • 3 days Is This The World’s First Truly Democratic Stock Exchange?
  • 3 days India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 3 days First Quarter Profits Slip For World's Top Oil Companies
  • 3 days The Yuan May Be China's Biggest Weakness
  • 4 days Hedge Funds Having A Banner Year
  • 4 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 4 days BHP Turns Bullish On EVs
  • 4 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 5 days The $90M Inflatable Rabbit Redefining Modern Art
  • 5 days Huawei’s Fate In The Air
  • 5 days Tesla Slashes Prices Again
  • 5 days The Modern History Of Financial Entropy
  • 6 days Italy’s Central Bank Embraces Sustainable Investing
  • 6 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Mary Anne & Pamela Aden

Mary Anne & Pamela Aden

Mary Anne and Pamela Aden are internationally known analysts and editors of The Aden Forecast, a market newsletter providing specific forecasts on gold, gold shares…

Contact Author

  1. Home
  2. Markets
  3. Other

Gold Shares: Lows are Near

As most of you know, many mining companies have fallen by over 90%. The HUI Gold Bugs index has fallen 83% since its 2011 peak in the second longest bear market in gold shares on record. It's fallen twice as much as gold's bear market loss of 43%.

But looking at the next two charts, both are saying the lows may already be in.

The bear market is not over until it's over, but the gold shares to gold ratio on Chart 1, sure looks like a low is near.

Gold Mining versus Gold Mining/Gold Ratio

Note the sharp spike down to record lows this month.

Its intensity looks similar to 1980 when it spiked down below the mid-channel line.

Interestingly, at that time gold was much stronger than gold shares during the best part of gold's bull market at the blow off peak.

This time the spike is due to gold shares being extremely weaker than gold. It's now at the bottom side of a 44 year downchannel and it's formed a several decade downside wedge.

This big picture shows that gold shares started to become weaker than gold in 1996.

And it also clearly illustrates how cheap this market is today...

The worst four+ year bear market in gold shares started in 1996 and it ended in 2001. And now, today's bear market is matching this record.

Comparing the two time-periods, you can see the similarities (see Chart 2). That is, today's bear market decline since 2011 looks a lot like the terrible 1996 - 2001 gold share decline.

Comparing Gold Shares Bear Markets

The craze then was the tech frenzy. Irrational exuberance went out the window and tech stocks soared, leaving gold shares in the dirt.

Most exciting now is to see how close today's lows are to the worst bear market's lows. This is saying we could well be near the lows in gold shares. For now, the HUI index would start to look good by staying above 120.

 

Back to homepage

Leave a comment

Leave a comment