Gold and WTI Rally While Gold and Energy Stocks Decline


Author Larry Berman

Posted: 10 July 2012 re-posted from etfcm

It’s never a good day when WTI rallies and energy stocks decline. It’s never a good day when gold rallies and gold stocks decline. Investors should get used to it. We had a caller on the show yesterday asking about the disconnect between gold and gold stocks. This is indeed one of the major conundrums of the TSX and while we are confident gold’s longer-term trend is up, gold stocks have not made any money as a group for the past 5 years, as measure by the XGD, and are down about 30% from recent peaks. We also know that the sector valuations are near the low-end of a two decade range, so there should be some fundamental value players stepping up during the second half of the year when earnings are more favourable.

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