Gold Shares: Do they Hedge Stocks?

ARTICLE ON GOLD vs. GOLD SHARES
excerpts:
DO GOLD STOCKS ANTICIPATE GOLD?: If gold stocks don't always move in lockstep with gold, another theory explaining their movement is that gold stocks allegedly anticipate changes in the price of gold. In other words, a rise in the price of gold might not be matched by a rise in gold stocks if the gold stocks have already risen in anticipation of the change. However, this is not reflected in the charts above. Many of the changes in the XAU hardly anticipated the price of gold; they were in close synchronization.
...
Looking at these charts, the movement of the S&P500 (the light blue line) seems to explain many of the above-mentioned inconsistencies in the movement of gold stocks (again the pink line). What's particularly significant is, not that gold stocks were influenced in the opposite direction as the S&P500, but in the SAME direction. For example:

-in the period from about December 1998 to July 1999, recall that gold fell at least 10% but gold stocks did not fall as dramatically as usual. The explanation for the inconsistency may be the movement of stocks since they went up during this period, seemingly offsetting the downward effect of gold;
...
On one hand, the above theory runs counter to another common thought that, what's good for stocks is bad for a gold, and vice versa. But the charts show a pattern.

Moreover, the fact is that gold stocks are not gold, they are still stocks.
...
...the main point here is that, if gold goes up and the S&P500 goes down, gold stocks will likely still go up, BUT NOT AS MUCH AS YOU MIGHT EXPECT IF YOU WERE JUST FOLLOWING THE PRICE OF GOLD.
To predict gold stocks, the equity market ought to be considered too.

:LINK: