Philadelphia Gold and Silver Stock Index Up 90 Percent in 90 Days
This from Numismaster.com
By
January 27, 2009
Who says that everyone is losing money in these volatile markets?
The Philadelphia Gold and Silver Stock Index (XAU) is up 89.6 percent in the period Oct. 27-Jan. 26. In the same time period, NASDAQ is down 1.1 percent, the Dow is down 1.2 percent and the S&P 500 is down 1.5 percent.
Over the same time period, the spot price of gold has jumped 22.5 percent and silver is up 31.5 percent.
Statistics can be diced and sliced in many ways to serve the bias of the analyst. For instance, the XAU has been almost twice as high in the past year, so its level on Jan. 26 doesn’t look so wonderful in that context.
What happened to the prices of the 16 gold and silver mining stocks that make up the XAU index is that their prices were devastated after precious metals hit their peaks last March. As the prices of gold and silver retreated, gold and silver mining stock prices fell much further. By autumn, the market capitalization of some primary silver mining stocks was so low that it was less than the companies’ holdings of cash.
Still, the strong rebound of the XAU in the past three months may not be overstated, despite the “too low” starting point.
I also consider the rise in gold and silver spot prices in the last three months to be too small. When you consider that the growing evidence has pretty much proved the U.S. government is behind a major effort to suppress gold and silver spot prices, the significant increases that did occur are amazing.
