brilliant. so simple, and yet, almost EVERYONE commenting on the divergence (myself included!) missed this. amazing.
there's only one problem - the International 10 Index that he tracks, which is more similar to the GDX than his "Canadian 11" index is, HAS underperformed gold prices even when he looks at the market cap of the index...
Your points about GDX (or what I called the Pollitt International for lack of better phrasing) are right. The market cap of the GDX is still appreciating slower than the gold price. It is interesting though that its value is appreciating faster than its price, so the discrepancy between gold and large gold shares is not as big as is commonly conceived. Having said that, I was quite surprised when I computed the numbers to see how fast the Canadian-11's value had appreciated relative to gold. The Canadian-11 only includes a small sample of miners who have producing mines here in Canada. If I had included the 100s of other juniors and companies nearing production, I'm sure that would add significant quantities to shares issued and value, though in general the prices for these juniors has not been increasing. My guess is that if you could add up the market caps of all the seniors, juniors, and explorers in Australia, US, Canada etc., including all the new entrants over the last few years, you'd see a combined market cap that appreciated nicely along with the gold price - but only because of new capital flowing into the space, not price rises. But computing that market cap would require a heroic effort and will have to remain just a hypothesis.
JPK,But computing that market cap would require a heroic effort and will have to remain just a hypothesis. A hypothesis or something known to the largest Bullion Banks and Central Banks? Perhaps this is yet another example of information asymmetry.Thanks to Bron for posting these reports and to you for producing the Pollitt analysis.
I would have thought a group like 'Goldnerds' would be able to grep that data pretty quickly..