The situation in which we currently find ourselves, in which an inverse relationship has developed between the stockmarket and the POG is nothing new. During the 1987 stockmarket crash the price of gold rose dramatically while the gold stocks plunged. It is simple enough to understand, all stocks get sold in a big sell off because of margin calls and investors selling what they own to cover their losses. So if the market goes down San goes along for the ride. However if the market goes up then gold goes down...and this is the really annoying part because gold stocks will continue to go down because they follow the POG! This is what happened in 87 when the gold stocks were the last sector to recover. After the rollercoster ride comes to an end the relationship between the price of gold stocks and the POG then slowly re-establishes itself. In the meantime however, I wish that San would release some of those ostensibly great drill results they are sitting on to ease the pain a little. Throw us a bone will ya!
