• 315 days Will The ECB Continue To Hike Rates?
  • 315 days Forbes: Aramco Remains Largest Company In The Middle East
  • 317 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 717 days Could Crypto Overtake Traditional Investment?
  • 721 days Americans Still Quitting Jobs At Record Pace
  • 723 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 726 days Is The Dollar Too Strong?
  • 727 days Big Tech Disappoints Investors on Earnings Calls
  • 728 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 729 days China Is Quietly Trying To Distance Itself From Russia
  • 730 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 734 days Crypto Investors Won Big In 2021
  • 734 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 735 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 737 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 737 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 741 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 741 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 742 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 744 days Are NFTs About To Take Over Gaming?
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  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