The march of gold.

Gold finished trading at 996.80 (if I can believe the after hours trade) down $1 from Thursday. A lot of forecasters now figure on a gold breakout coming sooner than expected, followed by another big drop in the Stock Market. The question is whether gold prices and the price of gold mining stocks will hold their value in a second ObamaCrash. Here is the graphic of the gold bug index for recent years.

As you can see, gold stocks lost about as much as other stocks. At this point, the Stock Market is still advancing while gold is moving up. This could change and change rapidly. Here is the graphic for the ETF GLD (exchange traded gold fund that owns actual gold):

Notice that gold hit its top in Jan 2008 and lost some value in the ObamaCrash, but only lost 30% instead of the 50% loss in stocks. It would appear that if we have another crash, not even gold stocks will be safe. I might add thouth that the ObamaCrash of Oct-Nov last year was exaggereated by the deflation used to elect Obama and it is not likely to be redone in the next dip.