"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 23 hours Why Criminals' Cryptocurrency Choices Matter To Average Investors
  • 2 days OPEC ‘Supergroup’ Keeps Oil Exports Subdued
  • 2 days One Belt, One Road, One Direction for Precious Metals
  • 2 days Vicious Trio Keeps Bitcoin in Chokehold
  • 2 days How Infrastructure Is Driving A Commodity Boom
  • 2 days What’s Really Happening With Venezuela’s “El Petro?”
  • 2 days Gold Bull and Bear Markets
  • 3 days 5 Big Drivers of Higher Inflation Rates Ahead
  • 3 days U.S. And China To Face Off Over Aramco IPO
  • 3 days Gold Bulls, Brace Yourselves – Fed Hikes Are Coming!
  • 3 days Stocks Fail to Hold Gains, But Still No Correction
  • 3 days Cryptojacking: A New Threat Vector To Critical Infrastructure
  • 4 days Why The Next Oil Boom Will Be Fueled By Blockchain
  • 4 days 5 Things Investors Should Know About China this New Year
  • 4 days Is The South Korean Crypto-Drama Finally Over?
  • 4 days Miners’ Rally? What Rally? Watch Out for More Fake Moves!
  • 4 days Four Percent 10-year Note Yield Will Be a Floor Not a Ceiling
  • 4 days The End Is Near
  • 5 days 5 Record Breaking Gemstones Even Billionaires Can’t Buy
  • 5 days Irredeemable Currency De-tooths Savers
Decision Time

Decision Time

Last week, I mentioned that…

Irredeemable Currency De-tooths Savers

Irredeemable Currency De-tooths Savers

An irredeemable currency system traps…

Gold and Gold Stocks Consolidate at Resistance

Gold and gold mining shares rebounded strongly from the end of December through the first three weeks of January. Over the past several weeks the sector has digested those gains while holding above rising 50-day moving averages. The sector is nearing a bit of a decision point where either a breakout could occur or further corrective activity.

Gold has snapped back after hitting trendline resistance at $1300/oz. Gold is consolidating below the trendline and around its 400-day moving average ($1277/oz) which it has not wrestled with since exactly two years ago. A confirmed break above the trendline and $1300/oz would potentially put Gold on a path to $1400/oz. There is Fibonacci resistance and weekly resistance around $1380-$1390/oz. If Gold can't breakout then look for support around $1240/oz.

Daily Gold Chart

The daily line chart of GDX (large gold miners) is below. GDX has consolidated below a confluence of major resistance for several weeks and has held in well. The 400-day moving average has marked each important top since 2012 while the trendline dates back almost as far. A confirmed break above the trendline would bring targets of $27.50 (21% upside) and $30.00 (25% upside) into play. A break above an RSI of 70 would signal sustained positive momentum and offer strong confirmation of the breakout. GDX has strong support at $20.50.

Market Vectors Gold Miners Daily Chart

Gold and gold miners in particular have digested recent gains in bullish fashion and could be positioning for the next move higher. The miners turned up in December ahead of the metals and led the rebound. In recent days the miners have inched higher while Gold and Silver have remained flat. That leadership could be another positive leading indicator. At the same time, failure to breakout immediately isn't necessarily bearish. Further consolidation while maintaining support puts the market in better position for a sustainable breakout. Given the significance of the 400-day moving averages, the next breakout could mark the start of a bull market in earnest.

Good Luck!

 

Consider learning more about our premium service which includes a report on the top 10 junior miners to buy.

 

Back to homepage

Leave a comment

Leave a comment




Don't Miss A Single Story