I smell upcoming curveball event: divergence of HUI and XAU
we have a technical inconsistency now showing with the 200MA breakdown in XAU, but 200MA support in HUI
the heavy presence of hedged miners in XAU will next become extremely evident imho, causing confusion among gold miner investors
the brokerage houses who dont like gold will use it to dismiss the gold rally, invalidate it, and attempt to pull gold investors off the newly established trend
the next run for gold could be from a base of #295 to a much higher level
my guess is over #350, and perhaps even higher
as this occurs, if this occurs, when this occurs, we will see some extreme damage done to Barrick, Placer, and even AngloGold
these are large-scale hedgers
I actually expect a possible hedgebook blowup for Barrick, and a threat of bankruptcy
if and when this occurs, the XAU index will slow its growth or remain flat
WHILE THE HUI INDEX CONTINUES UPWARD IN A SHARP ASCENT
gonna be interesting, to say the least
one line used by TanRange CEO Sinclair has stuck with me
"this gold rally has been disbelieved by both its bulls and bears"
I expect confusion to worsen
comments welcome
but with HUI and XAU showing different stories now, this will unfold with some internal conflict for a while longer
/ jim |
