"We still have the same problem with the gold shares that we have had for some time now – the hedgies are leaning on them with those infernal ratio trades where they buy the bullion and short the share market. The HUI is well off its recent high from last month near 502 and quite a bit lower than the December 2009 high above 516. That is not to say that the HUI chart is not constructive; it is, as all the major moving averages are trending higher again but until it can clear 500 on two consecutive trading sessions, it is going to leave many holders frustrated. I wish I could say when this will change – it will at some point but as to when, I do not know. That spread trade of the hedge funds has worked out very well for them so they will continue attempting to work it until it stops working. That is not much of a keen insight into the alchemy of the mining share world but at least it is an accurate description of what is going on. I will maintain until proven otherwise, that the ETF, GLD, has siphoned off a large amount of money that in time past would have otherwise flowed into the mining shares and this is what allows the spread trade to work so effectively for the hedge funds."

K.