XAU Philadelphia gold/silver index, update and ZJG

Then 11/20 /11, and now charts;

xau 20 nov 2011xau june 21 2013 b

At the time we had identified the top around 240 quite accurately and were looking for a drop of about 100 points in wave 3 and a further 80 points in wave 5 after a 4th wave rally. So far we see no compelling reason to change the analysis. Wave 4  (of C) may start here at around 90, slightly lower than the 100 or so anticipated but the difference is not material.

As a reminder, the XAU consists of 13 senior gold miners so that does not bode well for them but  a lot worse for the juniors. First, however, we should get a tradable 4th wave. Below is the 30 year detailed chart, in brown this scenario, in purple a possible bullish alternative.

xau june 21 2013

Notice that we are already trading well below the 30-year average. Like in all wars, the Fed. is fighting the last one and is surprised to find itself trying to create inflation rather than dampening it.     The idiosyncratic characteristics of gold stocks are such that they do not necessarily move in tandem. Some may be chocking on colossal misinvestments while others are trying to digest badly managed take overs. Some have political problems and again others are not in areas where you would like to go on vacation. As a group, this is what can be expected. Below are the juniors by way of BMO’s ZJG, see also previous two blogs.

zjg 21 june 2013