Nearing the tipping point.

There is a debate raging among gold bugs about the divergence of the gold miner index (first graph) and gold itself (second graph).

Gold seems to be holding up much better than the gold miners. When I last posted, gold was heading up and so was the gold miner index. Since then, gold went sideways and the gold miner index gave up its last gain.

In fact, PM miners are being sold off (allegedly by the hedge funds). It is easier to short gold and silver miner stocks than gold itself.

Nothing changed much fundamentally. Greece's financial ratings fell to CCC, the lowest in the world. Greek default is imminent. US default is not far off. In fact, the Chinese rating agency already considers the US in default, because of the drop in the value of the US Dollar. There is also a game of chicken between the House and the Democrats aided by the Media. The Obama regime threatens default if the debt ceiling is not raised. The deadline is Aug 2 or thereabouts.

Meanwhile, the US economy is sinking and the FED is saying it is done with QEII. Treasury notes in fact are not selling well and some people expect the FED to raise interest rates. But, to raise interest rates in a worsening economy is to invite a Depression and political defeat. Make no mistake! There will be more money printing. Only the method is in question.

What about PM miners? I consulted my internal instinct. I see panic and a desire to sell. That means we are nearing the bottom. Just another month now.