An Inconvenient Truth: The HUI:GOLD Ratio

June 22, 2015

There are no words to describe the Carnage that Precious Metals Stocks have suffered for the 12 years. There is no consoling those who have invested in this sector, many who have literally lost their life’s savings as they watch this horror unfold in utter disbelief.

The best way to gauge this complete evisceration of Precious Metals Investors is to follow the HUI:GOLD Ratio .

This ratio compares the most widely followed PM Mining Index, the HUI …Numerator with the Price of Gold …Denominator

This Ratio is widely followed by PM Analysts, many  who have been calling for it to bottom since it entered its bear market in…get this…2003!

Yes 2003!

Rambus has documented the fall of this ratio ever since he began this website and has just tonight posted an update showing it has actually broken out of a small consolidation pattern this past week and is now BELOW where it was at the beginning of the Late Great Gold Bull Market in 2001.

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Excerpt from Rambus Chartology Weekend Report June 21 2015.

“Next I would like to update you on the long term HUI:GOLD ratio chart we’ve been following that shows this ratio has finally broken below major long term support, going all the way back to the 2000 low. I have literally waited several years for this ratio chart to break .13 and it finally has. The little H&S consolidation pattern that formed right on the S&R rail has been the key in looking for this ratio to break to new all-time lows”.

Please take a moment to let this stunning chart sink in.

Especially if you have been holding PM Stocks with the view that this ratio cannot possibly go any lower or if you have been bottom fishing in this god forsaken sector.

The price of the Major PM Mining Stocks, as represented by the HUI, is BELOW where they were when gold was trading at $250, 15 years ago.

And in spite of all the analysts saying this was absolutely impossible, this Incredible Ratio is breaking down yet again to new all-time lows.

The Mind Boggles 

Rambus Chartology is Primarily a Goldbug TA Site following the precious metals markets. Chartology is the Unique Blend of Technical Chart Pattern Identification and Market Psychology,  Developed by Rambus During the Tech Mania of the late 1990s.  His Early Training came the old fashioned way...Reading Edwards and McGee's Bible of Technical Analysis and spending years with a sharp pencil graph paper and ruler refining his skills and accuracy. Visit the Rambus Chartology website at http://rambus1.com/.

According to the Talmud you should keep one-third of your assets each in land, business interests, and gold.

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