I believe Peter's thinking that if the market heads lower, PM stocks will be pulled down with it, while gold will not. PM stocks have two personalities - they can represent the commodity and they can represent stocks. All depends on investor sentiment. This was clearly evident during the crash. Gold corrected and gold stocks crashed.

Since the bottom, gold stocks have only outperformed gold by a small amount - they haven't caught up yet from before the crash. Therefore, their relative value compared to gold is still quite good. For that reason, I prefer the stocks. I also don't believe the market will crash, merely have a long grinding (but not too deep) correction after the current rally ends. That kind of a market is best for stock pickers. Since this is not my forte, I plan to raise a lot of cash and take most of the summer off - just putz around a bit.

I think we will have a powerful rally starting in the fall. Stocks should outperform the metal in a strong market.