The chart below shows all of the worst bear markets in gold stock history. For the current bear market (black) we replaced the HUI Gold Bugs index with the XAU index. The reason is the XAU is a better reflection of the historical Barron's Gold Mining Index (BGMI). The HUI is more volatile. This chart suggests that if the gold stocks have not bottomed yet, they are damn close.
A similar conclusion can be made upon examination of the monthly chart of the HUI Gold Bugs Index and GDM Index (father of GDX). GDM bounced from a level of support that dates back to 2004.
While the mining stocks by themselves appear to be very close to a major bottom, the metals are creating some uncertainty.
In looking at the history of cyclical declines in Gold we find that the shorter declines tend to end with a strong selloff as was the case in 1976 and 1985. The current decline is most similar to those two.
Artículo completo: http://www.safehaven.com/article/32090/gold-stocks-nearing-major-bottom
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