Cyanide Has a Poisoned PenWhile it is true that Canaco traded higher when gold was lower, to say that the price of our little baby has nothing to do with the price of the yellow metal is to ignore the single most fundamental factor in the marketplace:
PSYCHOLOGY
It has been so long since we had a full blown bull market in gold equities that many may never have experienced the irrational exhuberance that develops after gold has rocketed up day after day. There comes a point when all the investors sitting on the sidelines finally get fed up with missing the boat and then jump in with both feet.
The white hairs among us may remember the 1970's culminating in the leap to $850 in 1980. Penny stocks rose thousands of percentage points in that decade. It is going to happen again, but not for a while. Although we had a great day today, the masses are still on the sidelines and are not true believers. Ask your neighbour if he thinks the bull market in gold has only just begun, and chances are he will look at you kinda oddly and smile...now there goes a guy about to lose his shirt, he thinks.
But several months from now, when gold is hundreds of dollars higher and equities have doubled, he will become a believer and actually start recommending stocks to you! The madness of crowds has been observed and documented for centuries. Think Tulip Bulbs
This time will be no different.