In times such as these of extraordinary market volatility there are two basic scenarios. Under these two, this is the way the PM Miners trade:
1) When the broad markets drop hard, gold bullion rises due to the ‘safe haven’ factor. Mining stocks drop, pulled down by the market dump.
2) When the broad markets rebound and spring back hard, gold drops due to the reversal of its safe haven role. Mining stocks drop, pulled down by the gold dump.
Any further questions?
UPDATE: Long-term reader and mailpal JH writes in:
“(Y)ou forgot the third observation:When
the price of gold rises so much that even dogs become profitable,
Mining executives waste half the money and pocket the other half.”
Merci monsieur