On June 27th, in a note to clients and friends of the firm, we suggested that the panic in the metals and mining sectors was so extreme that it had to be a bottom by everything we have experienced and studied in our careers. The chart below suggests that our call was correct, at least based upon what has ensued so far.
The top line is the Amex “Gold Bug’s Index” (HUI) which represents a basket of gold mining companies. The bottom two are for the S&P 500 and gold. The returns in the chart are for the period since our call to the close of trading last week. As you can see the Index nearly tripled the return of gold itself.
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