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« A Readers View of the Current Situation | Main | USD To Rally Within Bearish Channel? »
Tuesday
Oct202009

Gold, Silver, HUI and the Dollar Compared

Gold Comparison Chart 21 Oct 09.JPG

A quick look at the above chart and we can see just which investment vehicle has performed the best over the year so far. The unhedged gold and silver producers as represented by the Gold Bugs Index, known as the HUI is in pole position with a terrific gain of 146%.

This is good news for the holders of stocks as for a while the stocks went through a lackluster period losing their leverage to the precious metals sector. It now looks as though a return to the norm is well and truly in progress as the stocks provide a better return to the investor then the physical metal, which they should as owning them carries a number of risks.

In second place we have silver which has put in a magnificent performance with a gain of 84%. Still nowhere near its all time high so silver has a long way to go, however we do expect it to have outperformed gold by the time this bull market comes to an end.

Gold is playing its part admirably despite the detractors and the knockers predicting much lower levels for gold. Inflation aside it is standing at record levels and we expect it to continue to be the trail blazer for the next few years.

The US Dollar is heading south and down about 12% over the same period. Many are looking for a bounce at this point and a recovery to take place. We expect the dollar to be drift lower despite putting in the occasional mini rally which will put a temporary cap on gold prices. However the time will come when the precious metals will rise regardless of the dollars behavior.

Your thoughts are of course most welcome and it would help if you can add your comments and questions via the comments section under each article as we just cant find the time to answer all the emails that we receive.

Have a good one.

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Reader Comments (3)

Great chart & comments. Thanks.

October 21, 2009 | Unregistered CommenterJ

Can you buy the HUI if so what is the symbol

October 21, 2009 | Unregistered CommenterS

S,

This is not a recommendation but you could take a look at GDX which tracks a different index of miners to the HUI, however it is pretty close to it.

We have plotted the GDX against the HUI so that you can see just how close it is, just click on this link.

http://stockcharts.com/h-sc/ui?s=$HUI&p=D&yr=1&mn=0&dy=0&id=p15867809628

Our preference is to select individual stocks from the HUI, but thats just us.

Hope this helps.

October 21, 2009 | Unregistered CommenterGold Prices

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