Friday, 23 March 2018

GDX - significant gains with gold

With Gold and Silver net higher for the week, the related miners followed. The gold miner ETF of GDX settled the week on a very positive note, +2.9% at $22.12, resulting in a net weekly gain of +3.2%. Near term outlook is offering further upside. Things turn decisive if Gold >$1400, which would offer hyper upside in GDX to $50 by mid 2019.

GDX weekly

GDX daily


The mining stocks are naturally continuing to closely track gold and silver. Broadly, the miners are just churning, as gold has been, since early 2017. Things would become provisionally interesting if GDX can break above the 50/200dmas, currently in the mid $22s. Things turn decisively bullish above the $26s.

Most favoured miners...

Newmont Mining, monthly

Newmont is fundamentally and technically the strongest of the gold miners. Indeed, its currently the biggest component of GDX (Barrick Gold is the second). A break above the $42s would be decisive, and offer a fast move to the 2016 high in the $45s. Above that, its open air to the 52/53s.

Barrick Gold, monthly

With four trading days left of March, ABX is net higher by a very powerful 8.5%. Cyclically, we're on the very low side, and due another multi-month up wave. The stock will remain technically bearish until >17s, although that number is lower with each month. The bold will be buying, with a stop no lower than the recent low of $11.07.

To be clear, I really like the miners, but the more cautious will leave the sector alone until Gold >$1400, and/or GDX >26s.