• 23 hours Markets Unfazed As Inflation Hits 13-Year High
  • 2 days How the Token Economy is Disrupting Financial Markets
  • 4 days FBI Investigating 100 Types Of Ransomware Attacks
  • 6 days Fed Ends Corporate Credit Emergency Lending Program
  • 8 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 9 days The Real Reason Your 401k Has Been Lagging
  • 10 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 12 days The Market Is Ripe For Another GameStop Saga
  • 15 days Senate Grills Big Banks Over Pandemic Opportunism
  • 16 days Cannabis Has A Major Cash Problem
  • 17 days Ransomware Netted Criminals $350M In 2020 Alone
  • 18 days Russia Is Taking On Google
  • 19 days Chinese Regulators Deal Another Big Blow To Bitcoin
  • 20 days Ohio Residents Brave Vaccine for Chance To Win $1M
  • 22 days Inflation Is Coming. Are You Prepared?
  • 23 days 3 World-Shaking Trends Investors Need To Watch This Year
  • 23 days Travel Might Get Another Supersonic Disruption
  • 24 days The World Is Running Out Of 6 Key Resources
  • 25 days $15/Hour Minimum Wage Might Happen Naturally
  • 27 days Money-Laundering Binance Probe Report Adds To Bitcoin Woes
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Gold Miners Holding Gains in Bullish Fashion

We published a video update a few days ago discussing the short-term outlook for the precious metals sector which includes the gold miners. With regards to the miners, we took the view that they could digest recent gains and hold support or break lower and trade close to the support near summer lows. After this week and today especially, one scenario is more likely.

We plot the daily candle charts of GDXJ and GDX below. There are numerous bullish points to make. First, the miners tested and held above support in each of the past five days. That culminated with a strong intraday reversal today (Friday). Second, the miners held above their 38% retracements which indicates they are holding most of their recent gains. Third, the miners will close today above their late August peaks. Fourth, the miners have held gains in the face of a very strong US Dollar.

Market Vectors Gold Miners and Junior Gold Miners Daily Chart 1

The miners have formed potential cup and handle patterns with the handle depicted in yellow (above). The potential upside targets are $27-$28 for GDXJ and $20-$21 for GDX. These targets are possible and would become probable should the miners break above their 200-day moving averages at $17.82 for GDX and $23.52 for GDXJ.

The next chart is a long-term look that includes the very significant 400-day moving averages. The aforementioned potential cup and handle targets nearly equate to the 400-day moving averages which need to be breached before a bull market can be declared. The 400-day moving average contained GDXJ's peak in 2014 and GDX's peaks in 2014 and 2015.

Market Vectors Gold Miners and Junior Gold Miners Daily Chart 2

The miners' holding of support for five consecutive days in the face of a surging US$ and a lack of strength in metals prices has increased the odds of the bullish scenario playing out. After enduring a devastating bear market the miners should be ripe for a recovery at some point. Need we mention that the gold stocks have been in their worst bear market ever and second longest? Need we mention that senior miners have been in a bear market for almost five years while junior miners have been in a bear market for four and a half years? The near term outlook looks bullish and if that plays out one would have to think a major long-term turn was at hand.

 


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.

 

Back to homepage

Leave a comment

Leave a comment