Sunday, January 25, 2009

Gold:XAU ratio in buy zone

Following up on my last post. If the breakout in gold is for real (and even if it isn't) the miners are a sreaming buy right now.

During the forced liquidation in Oct. and Nov. the miners got beaten down unmercifully. Compared to the price of gold they have never been this cheap.

Even after rallying over 100% the miners are still incredibly cheap. In fact at the current gold price the XAU would have to rally to $220 just to be fairly valued.