Near Record High Gold/XAU Ratio Prompts Buying in Gold Equities

While the yellow metal has declined considerably in recent months, gold equities have continued to fare even worse. With today’s sell-off in precious metals, the ratio of the price of gold to the Philadelphia Gold & Silver Index (XAU) reached another new multi-year high.

In late Monday morning trading, COMEX gold futures were lower by $9.80 at $1,633.00 per ounce while the XAU – a leading composite of the world’s largest precious metals companies - fell 2.5% to 160.08.

At its current level of 10.2, the gold/XAU ratio reached its highest point since the depths of the 2008 financial crisis; the ratio’s all-time high occurred on October 24, 2008, at 10.72.