If gold stocks are lagging the POG, it might indicate a suspicion in the market that the POG will come down in the future. After all, a gold miner's value should be based to a large extent on projected future earnings; if the market makers are valuing gold producers based on $900 gold, share prices will be less than you think they should be.

Another possibility: the market is assuming that any increase in POG will be related to commodity price inflation, which will also hit gold miners' cash costs. A gold miner will be less attractive at $1300 POG if it's accompanied by an advance in the price of oil to $150, for example.

I'm suspecting that a June-July POG advance beyond $1300 will be enough to get the market to increasingly reject valuing miners based on the conservative $800-$1000 figure, in favour of crazy $1200-$1800 valuations. Especially if future POG variations demonstrate $1240 to be a new support level. Let's see what happens, eh?

At least, so it seems for now, we've picked the right sector to invest in.