For all the wild swings the markets have been making, gold stock related ETFs and indices have been acting like they don’t care. Nothing in the last month or so has fired up investors to hit the “BUY” button. What does it take? The wedge you see will certainly tell us, as the HUI has to “Breakout” or ” Meltdown”. There is no middle ground as the only other option is for gold stocks to keep going sideways. The Gold/HUI ratio was at 8.2:1 this morning which is getting cheap but not an extreme just yet.
RING is a gold stock ETF and it looks much like the HUI does. Gold itself is fooling us because the same pattern in gold is facing up! The same wedge applies to RING which is trapped in the “Cone” of the wedge. I have no large database of Gold/Ring ratios but this morning the Gold/Ring Ratio is at 80.9:1. HUI and RING look like twins, but other ETFs are much lower. Some Canadian ETFs have had new lows a week or so ago. RING had about a 49% drop from its peak, while the HUI had dropped about 52%.
I would love to go long but there are still too many bulls around for my liking. Next time I will post some of the worst gold stock ETFs that are near to hitting new all-time record lows.