Since 2011 gold and related equities have been in their downtrend. But in most cases financial markets go in cycles with some transition periods in between. Looking at the gold market I try to measure its strength against other markets/instruments. Then I try to find at which stage the gold market is or could be.
Below I am comparing the gold market to the world equities ($DJW).
As the chart shows, between the middle of 2007 and the third quarter 2011 the gold market was much stronger than equities (yellow area is attributable to this period). Then, between the third quarter 2011 and the end of 2012 there was a transition period, where gold was loosing its strength. Since the beginning of 2013 we have seen much stronger equity market (green area).
Then, since October 2014 gold seems to be in its transition period once again. At least it is not weaker than the world equities. Will it break up? I do not know (it is still one of the most hated sectors) but the chart below should generate appropriate signal when the time is right.