Gold Stocks:

I don’t usually write about stocks – I’m an ETF man myself (Go China…), but this morning it was pointed out to me that the main gold stocks (Barrick, Goldcorp and Newmont) were behaving strangely over the past few days --- down while the markets were up.

It seems that gold prices (the metal) continue their unending reach for the star program, with gold flirting around the $1270/oz level – which by the way is near an all time high (in dollar term – in Euro to but not in Yen, go figure).  Anyway, the stock prices have been moving rather a lot (go on Google finance to check for yourself).  Its important to note that yesterday was a “bit of a rally” on the market – its seems that Mr. Market decided that despite all the bad news, life really, was not that bad after all.  But gold got clobbered – no special news, no new views as to the problems with fiat currency.  (BTW I have no explanation as to why Gold stocks were off by nearly 6%, while the market was up by 6% since the beginning of September -- especially since gold price have been rising consistently.

Also ZeroHedge had an article about the U.S. market activity – apparently 20 stocks account for ¼ of all market activity; it would seem that this is proof that high frequency trading is taking over the market (they only function in ultra liquid market).  Actually 126 stocks accounted for 50% of all U.S. market activity.    It would seem that the law of unintended consequence is alive and well here.  Having made market making “illegal” at the beginning of the decade, the market now relies on HFT to generate market liquidity; it does but only for a very few stocks.  Thing about it, only ¼ of the Forbes 500 make the active stock list.   No bloody wonder that mutual fund redemptions are so important, Joe Average thinks the market is rigged (it probably is) against him.

I don’t have a particular point to make here, just an observation. 

P.S.  I own no gold stock directly or indirectly (ETF) I have no position on the market