Monday, 10 February 2014

GDX - miners on the edge of breaking out

Whilst the main equity market churned sideways, there was some real notable strength in the Gold miners. The ETF of GDX closed a significant 3.4% higher, settling @ $24.73, just a touch under the key 200 day MA. A monthly close >25, opens up 30/35.

GDX, daily

GDX, monthly


The gold bugs - of which most are very much loaded with mining stocks, are understandably taking a real interest in the past few weeks of broad gains.

Yet...the bugs have been repeatedly teased since the grand decline began in late 2011..when GDX was in the mid 60s.

First things first, for those who are bullish the mining stocks...

1. a few daily closes above the 200 day MA
2. a monthly close >10 MA... the $25s
3. any subsequent retracement to hold above the monthly 10MA.

Still bearish on Gold/Silver

I remain broadly bearish on the precious metals until Gold has at least briefly tested the huge psy' level of $1000. However, this could take another year to which point Gold - along with the mining stocks, may have seen a moderate multi-month gain.

For anyone getting overly excited at today's GDX close, I can only refer them to the monthly action of Aug/Sept 2012, and July/Aug 2013. In both never ended very well.