Good Buying Opportunity: Diverging Moves in Gold Stocks and Physical Gold

In his latest podcast, Peter Schiff looks at the latest moves in physical gold and gold stocks as a possible indicator that the market may be in the early stages of a bull run. A few weeks prior, Peter pointed out that gold stocks were selling off (down 4%) while the price of gold was rising at 2%, an inverse relationship that may signal a downward move in physical gold.

As we saw last week, that prediction came true with a correction in physical gold that sent prices down 3% or about $40 on Friday. Even though gold was down last week, gold stocks (GDX and GDJ) were overall positive. Monday also saw a decline in gold with a $9 drop and GDX stocks fell around 3.4%.

The long view of these diverging moves between gold and stocks aren’t showing a perfect inverse correlation; however, Peter said he sees the overall trend as indicating that we’re near the bottom of the correction, which would mean a good buying opportunity in physical gold.

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