TSX vs. Gold

A cogent demonstration of how gold prices may perform is always compare the major index to the gold price. The dow vs. gold is a good indicator, as is the S&P vs. Gold, as there is a great deal of data to back you up.

TSX vs. Gold may do the same as other indeces, where the ratio of stocks to gold reaches a 1:1 ratio. Since the $CDN is trading above par with the $U.S, then the TSX vs. the $U.S. gold price will give you a very close approximation of the TSX vs. Gold ratio in terms of $CDN.

If we take the present value of the TSX vs. Gold @ 8.64X the price of gold, then the probability remains that the gold price is likely to reach something like $4409/oz. CDN, or TSX of 4592 pts.

The $CDN Gold price need only maintain a ~$1500/oz. average for a gainfully profitable mine in La Ronge. A much higher yearly average gold price can only mean much more free cash flow.

supersize: http://www.flickr.com/photos/11747277@N07/5794544842/sizes/l/in/photostream/

stockcharts.com

-F6