Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Stocks Something has Changed

Commodities / Gold and Silver Stocks 2016 Feb 06, 2016 - 12:59 PM GMT

By: Jordan_Roy_Byrne

Commodities

In our missive last week we noted that:

While good things are happening under the surface for Gold, its lack of a strong rebound in recent months argues that such a rebound is in the future but not imminent. Gold's steady downtrend could resume in the next week or two.


As we know, the precious metals complex enjoyed another very strong week. Gains in the metals were somewhat muted in comparison to the gains in the miners. GDX and GDXJ surged nearly 16% and 11% respectively. Last week we said nothing has changed. This week figures to be the week something did change and definitely so for the miners.

The strong gains in the miners since their January 19 low (31% in GDX and 23% in GDXJ) typify what could be the start of a new bull market. The current rebound can be compared to the rebounds from the major bottoms in late 2000 and late 2008. We use the HUI gold bugs index for comparison as the ETFs do not go back far enough. The HUI has gained roughly 40% since the January 19 low. That fits well with the analog chart below which puts the three rebounds on the same scale. If the gold stocks are in a new bull market then they should continue to make new highs over the next few months.

HUI Bull Markets

Next, rather than chart one of the mainstream indices, we will take a look at our Top 15 index which includes most of our favorite companies. Tuesday the index pulled back from a confluence of major resistance to close at 123. Instead of starting the next leg lower the index exploded through that resistance. Friday's activity is not updated but as you can see, the Top 15 index is on the cusp of a major breakout.

TOP15/USDCAD Weekly Chart

Turning to Gold, I see less evidence that Gold has established a major bottom. To be blunt, Gold needs a monthly close above $1180/oz, which has been a major pivot point since late 2009. First things first, Gold needs to close this month above $1150-$1160/oz. The bear scenario would have Gold making a bearish reversal sometime this month and closing below initial resistance at $1140/oz. The bull scenario would likely have Gold closing above $1160 and testing $1180 fairly soon.

Monthly Gold Chart

We should also note that while the US Dollar index failed to breakout, it remains well above major long-term support at 92 and 94 with sentiment indicators at constructive levels for bulls. As the US Dollar continues to consolidate, we want to see Gold hold recent gains and push towards $1180-$1200/oz. It would be a bad sign if Gold fizzles below $1160/oz with the US Dollar in correction mode.

This past week was likely a major turning point for the gold miners and perhaps Gold itself. The strength of recent gains (in the miners) coming off a false breakdown to new bear market lows suggests that the bear market ended on January 19. We should also note that four of the five largest miners (in GDX) are trading above their 400-day moving averages and at multi month highs. Meanwhile, as shown by our Top 15 index, the strongest companies in the sector are on the cusp of a major breakout. While we have some concerns on the metals we should note that the miners lead at major turning points. The miners are telling us something has changed.

As we navigate the end of this bear market, consider learning more about our premium service including our favorite junior miners which we expect to outperform into 2016.

Good Luck!

Email: Jordan@TheDailyGold.com
Service Link: http://thedailygold.com/premium

Bio: Jordan Roy-Byrne, CMT  is a Chartered Market Technician, a member of the Market Technicians Association and from 2010-2014 an official contributor to the CME Group, the largest futures exchange in the world. He is the publisher and editor of TheDailyGold Premium, a publication which emphaszies market timing and stock selection for the sophisticated investor.  Jordan's work has been featured in CNBC, Barrons, Financial Times Alphaville, and his editorials are regularly published in 321gold, Gold-Eagle, FinancialSense, GoldSeek, Kitco and Yahoo Finance. He is quoted regularly in Barrons. Jordan was a speaker at PDAC 2012, the largest mining conference in the world.

Jordan Roy-Byrne Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in