Friday, 31 August 2018

Miners following gold

The gold miner ETF of GDX ended the week on a moderately bearish note, -0.7% at $18.55, and that made for a net monthly decline of -12.8%. The mid term outlook is bearish, as key support has been decisively settled under.

GDX monthly

GDX daily


With gold lower for a fifth month, and silver cooling for a third, its not exactly a surprise to see the gold miners follow to the downside. The August break of support was decisive, and we've already seen GDX break below the Dec'2016 low of $18.43.

The m/t outlook for gold and silver is bearish, with GDX vulnerable to a FULL retrace back to the Jan'2016 low of $12.36. As a side note, its notable that Silver saw the lowest monthly close since Jan'2016.

Lets take a look at two of the key miners - which are the two biggest components of GDX,  Newmont Mining (NEM) and Barrick Gold (ABX)


An August net monthly decline of a fierce -15.4% to $31.03, back to levels from Dec'2016. Any price action in the 28s will offer a bearish run to the 22s.


A fourth consecutive month lower, settling -6.6% to $10.42, the lowest monthly settlement since Jan'2016 - when the broader mining complex was flooring.

Summary: whilst both companies are fundamentally sound, the m/t trends are absolutely bearish into late summer/early autumn. The related precious metals of gold and silver are m/t bearish, and offer ZERO sign of a floor/turn.

Arguably, even the most bold of gold bugs will leave ABX, NEM, and GDX... well alone.