The Really Useful Gold Thread

From Silicon Investor: jrhana Wednesday, Jan 1, 2003 6:34 PM
Respond to of 24547

Excellent article on gold and gold stocks Frank:
It helps debunk some common shibboleths that I always see being parroted here and elsewhere.


and


This is not necessarily a bad thing, as it means widely-held gold stocks are more secure. For example, if price of gold goes down and the S&P 500 goes up, the rise in stocks will provide some support for such gold stocks; they won't go down as terribly.

Meanwhile however 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.>

In other words Gold Stocks are not predicting the POG but rather reacting to it and they do not move necessarily directly opposite of the general equity markets. Buying gold stocks is very much different from shorting the market.

Thanks and welcome back. Prodigal Son!