XAU? It is the Philadelphia Gold and Silver Index, an index made of 16 gold and silver mining companies (link here). When you buy a gold mine you are buying a business but also "gold on the ground". Therefore it has to be connected to the gold price somehow.
We want to see how this relationship has behaved during the last years. On the following chart we show XAU divided by the price of gold:
It is very easy to see that gold mines are doing terrible, they are hitting the floor. However this creates a great opportunity for the ones who want to own cheap gold: instead of buying physical gold, buy gold mines.
Of course not all gold mining companies are the same, so either you choose the good ones or you buy the "market" through ETFs like GDX or GDXJ.
Statistically the combination of normal stocks and gold mining shares has decreased the volatility of the portfolio.