I talked with a friend over over the weekend who had some fascinating research about how gold stocks dramatically  underperformed the metal by a lot during most of the huge bull market in the 70s, just as they have in this bull market. The stocks did not outperform until after gold had topped out in 1980. The big rally in gold stocks apparently took place during the rally back, after gold had dropped from over 800 to 450, and then rallied back to 750, before going into a very long bear market.

He said that Newmont, one of the leaders back then, did not better its 1972 price until late '79, which is just amazing. The incredible thing is that Newmont peaked in '81, AFTER gold had fallen from 850 to 450! Apparently similar action took place in the other leading miners. 

And then, almost like this info was suddenly in the air,  I listened to an interview with Jim Sinclair who made pretty much the same point.

Here's the Sinclair interview:

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/5/11_Jim_Sinclair.html

Given that the major miners have underperformed the metal throughout this bull market as well, maybe there is a lesson from the past. I can't say I really understand why this was the case then, or now (I know the theory about the hedge funds shorting the miners against the bullion now, which may be true, but there were not hedge funds back then). If anyone can add any insight on this it would be interesting. If nothing else, it sure raises an interesting historical insight into bullion vs the miners.