Gold vs. XAU Index

This shows the correlation between gold and gold stocks as represented by the Philadelphia Gold and Silver Index, commonly known as the XAU.

“During the second quarter of this year,” says a new report from Marlmont, “shares of precious metals companies behaved strangely, actually going down in value when gold appreciated.”

“This negative correlation has never existed in the data that extend as far back as we could access, to 1992. There have been very short bouts when the movement of miners and the metal did not move well in unison, but never this.”

Their conclusion: “We frankly could not conjure up a more convincing case for owning companies that search for and produce precious metals — especially now that in recent decades these have underperformed gold bullion as dramatically as only seen in the meltdown of 2008.”