Despite precious metals and gold/silver mining stocks going flat this year so far, the drilling sector performs quite nicely:
Source: Simple Digressions
To remind my readers – the DRILL index comprises the shares of the following drilling companies: Energold Drilling, Major Drilling, Orbit Garant, Geodrill and Capital Drilling.
Note that the index can be considered as a leading indicator for the precious metals sector. For example, since March 2011 the DRILL index was under-performing against one of the most popular gold mining ETFs, GDX (the red arrow). For those that do not remember – gold made a top in middle 2011 and GDX topped in late 2011 but the DRILL index was at that time in its full-gear bear market phase.
Then, since the end of 2012 the index was flat against GDX, gold etc.(the violet rectangle) sending a message that not all things were that bad as many thought.
Now we have a very weak bull market in precious metals but the DRILL index is performing much better than GDX (the blue arrow). So, once again, the message is clear – the bull market in precious metals is still alive.
