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The Great Western Gold Robbery Is About To End

On the heels of unprecedented actions being taken across the globe, today a 40-year market veteran sent King World News a tremendous piece that shows the great gold robbery, which is looting gold out of Western vaults, is about to end.  He also included two fantastic charts.  Robert Fitzwilson, who is founder of The Portola Group, put together the following tremendous piece below exclusively for King World News.

Last week we wrote about the “Great Gold Robbery” in the mid-1800s and how minuscule it was compared to the global gold robbery that is currently taking place, as the great gold repositories of the Western world have been virtually exhausted.  As we know, the vast majority of this physical metal has been or soon will be sent to Asia, never to be seen again….
The final phase of the gold robbery began last week with the attempts to buy Osisko Mining and Allied Nevada shares at these artificially depressed prices.  Even compared to gold, the mining shares have been truly savaged as you can see from the 10-year chart below which shows the mining shares are down about 12% over the last 10 years, while gold is up roughly 165% during that same time frame:

It is hard to imagine that gold is still 43% higher than in early January of 2009, but the mining companies are down 31% during that same time frame.  The mining companies are certainly not without blame.  Barrick’s disastrous misadventure with the Pascua Lama project would take the top spot in our view.  It is also true that the miners are leveraged plays to the price of the underlying metal and costs have risen, particularly energy.

However, what it also shows is how tremendously undervalued the mining sector has become.  The two suitors for Osisko and Allied Nevada probably acted out of fear that the window for making such attempts is rapidly closing.  As you can also see by the second chart below, the HUI has decisively crossed the 50-day moving average.  To call this a breakout will require the index to surpass the 240 level in a similar decisive fashion.

Source King World News

 

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