I want KWN readers to take a look at the following 30 year chart, which I believe is the most important and extraordinary chart for 2012. It presents the XAU Gold Mining Index measured in terms of gold, not dollars:

“Today was another example of that, but there's an important point to be made here, Eric.

The precious metals bend a little with these bouts of selling pressure being put on them, but they come right back, which is why I describe them like a spring being wound up.  So when this spring starts to unwind, which it will, look out above.

I want KWN readers to take a look at the following 30 year chart, which I believe is the most important and extraordinary chart for 2012.  It presents the XAU Gold Mining Index measured in terms of gold, not dollars:

We’re making history here.  Gold stocks have never been this undervalued before.  We’ve had a 12 year bull market in gold, but we’ve also had a 15 year bear market in the mining shares that began with the Bre-X collapse.

It’s very rare in market history to see an outlier like this.  This is an extraordinary event.  Years from now we are going to look back and shake our heads in disbelief at how undervalued gold stocks were in 2012.

This 15 year downtrend and historic low has effectively destroyed the morale of virtually the entire gold mining investment community.  Psychologically, this has also had a tremendous dampening effect on the morale of those watching the gold bullion market.

We’re living in pretty tough times, Eric.  We all know the global economy is not doing well.  We see all of the problems that governments are trying to solve, but they are not coming up with viable solutions.  To make matters worse, the above chart is an illustration of the psychological onslaught that people who buy the mining shares have had to endure. 

This is part of the warfare against those in the gold community.  It is important to remember that before this is over, the mining shares will be trading like internet stocks.  Quality gold shares will be the Apple Computer’s of tomorrow.”

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Eric King

KingWorldNews.com

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