Monday, August 18, 2008
Royal Gold & the RGLD/HUI Ratio
Here are the weekly charts of Royal Gold and the RGLD-HUI ratio. Don't ask me what it is about an economic contraction environment that makes a gold royalty company outperform actual gold miners, but it happened during the last contraction and it appears to be happening again. Remembering back to the 2002 time frame, I recall RGLD garnering a lot of attention and some well coordinated smear (short) campaigns in the major financial media. Yet the stock continued to say 'screw you' and powered higher, a strong leader in the sector. Well, it is happening again on a relative basis, which if recent history repeats could translate to a big move for the entire sector. Me like.