Examine the 25 year graph of the XAU. The chart has been rising slowly but is currently deeply over-sold.
The S&P 500 Index (not shown) has rallied to new highs, looks toppy, and has been levitated by “money printing” and low interest rates. Examine the graph of the ratio between the XAU and the S&P. The ratio is currently at lows last seen in 2000 and is near all-time lows. Gold and silver prices have been weak for four years and the XAU has been crushed further. Expect gold, silver, their stocks, and their ratio to the S&P to rally in 2015 and 2016.
Have gold stocks fallen in tandem with gold prices? No! Examine the chart of the XAU to Gold ratio. It peaked in 1996 and has fallen since then. Gold and silver stocks have been “out of favor” for nearly two decades. The ratio hit a low in November of last year and is still exceptionally weak. Expect a rally.