What is cheap now?

The gold price is up and down like crazy nowadays. It was down over $20 last Friday and is up $30 today. Although the gold price is very volatile in the past several months, I must say it has held up very well. I was expecting the gold price would drop more by now but it has proven I have been wrong till now. While the gold price has increased significantly in the past 2 years and has been near its all time high at the moment, the gold mining stocks are actually very much lagging behind. Roughly, gold stocks currently are trading at the price level seen about 2 years ago when the gold price was at around $1000. This is very abnormal. Usually you should see much higher prices for gold stocks when the gold price is high. Logically if the gold price is high, the mining companies should earn more money and their stocks should be doing really well.  See the long term trend of gold stocks (in various sizes or combined as gold equities) vs gold price in the chart below. However, not this time. At least not yet till now. So believe or not, while gold itself is relatively expensive or at least not cheap, gold stocks are very cheap and potentially very profitable when they catch up. I'm starting to accumulate gold stock shares. I will talk more about investing in gold stocks next time.