by Hubert Moolman
Hubert Moolman’s Blog
Gold stocks need very specific conditions in order to perform well. The last time most of these conditions were present was during the Great Depression. However, conditions are currently shaping up to be even more ideal.
The performance of the Dow is one example of conditions that heavily influences how gold stocks fair.Historically, gold stocks had some of the best rallies after significant Dow peaks. This was true for the 1929 and 1973 major Dow peaks.
Given the above, I would make sense to say that the 2015 Dow peak is an important signal for significantly higher gold stock prices over the coming years. Below, is a long-term chart of the Barron’s Gold Mining Index (BGMI) that illustrates some of the conditions ideal for a gold stocks rally: