Traders Edge 7-11-12- all that glimmers

 A few quick updates. We increased our exposure to gold stocks in yesterday's trading- via the purchase of the Tocqueville Gold Fund (ticker TGLDX). It continues to be our thesis that the World debt crisis will result in further money printing by the central banks, leading to hard assets outperforming other investments. some charts for illustrative purposes. First a chart of the Phily Gold/Silver Index (ticker XAU). The index is down more than 25% from the high this year, has tested the 2010 lows, and looks to be consolidating. 

We also note that the price of gold looks to be consolidating also......

...while the XUA is trading significantly lower relative to the price of gold.

Lastly, we thought this analysis is particularly noteworthy. This shows the price of the XAU index and the standard deviation of the relative price of the gold ETF (ticker GLD) to M2 money supply. Buying opportunities on the XAU appear to arise when the standard deviation falls below -1. The current reading is -1.13 and we doubt that the money printing by the central banks will abate any time soon.