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1/23/08 The ratio of small cap junior gold stocks to the gold exchange traded fund is the lowest it has been in three years. According to 'Andy Hoffman' from La Metrople, 'Many reasons abound for why this underperformance has occurred, including skepticism about the gold/silver rise, surging mining costs, hedge fund liquidations (one that makes a lot of sense, by the way), distrust of drilling results thanks to stories such as Southwestern Gold (SWG.TO), and general ?fear of equities?. Each theory has some merit, of course, but in the big picture we have seen gold rocket to an all-time high (with silver reaching 28-year highs) while inflation has soared (per the CRB and CPI), economic growth has decelerated, gold and silver demand have exploded, and gold supply has plummeted. Meanwhile, global money supplies are going berserk, and this week?s announcements of unprecedented fiscal and monetary stimulus by the U.S. government should be the ?coup de gras? for anyone that still believes gold and silver prices are on the verge of a significant decline.
Each gold ?smash down?, such as the ones engineered over each of the past three days, has been met by frenzied, immediate buying, and after months of languishing, silver is finally starting to take the mantle of PM market leader. In other words, contrary to the action of the gold mining stocks in general, gold and silver HAVE NOT and WILL NOT be denied, and for those that want to hear it from a renowned expert, read Jim Sinclair's comments today.