Tuesday 30 April 2019

Miners falling with metals

The gold miner ETF of GDX ended the month on a fractionally positive note, settling +5cents (0.2%) at $20.89, but that still resulted in a net monthly decline of -6.8%. Things turn hyper bullish for the miners with Gold >$1400s and Silver >$21s. For now, that looks no closer than it had seemed five years ago.

GDX monthly

GDX, daily


With Gold and Silver cooling for a third consecutive month, the miners naturally followed. The net April decline is pretty ugly. Note the monthly 10MA at $20.52, a break under that would threaten May/June weakness to 18/17s... not least if the USD remains broadly strong.

Seen on a daily chart, it could be argued the miners are finding support on m/t rising trend. Cyclically, GDX is on the extremely low end, much like Aug'2018.

Of the sector, I would favour Barrick Gold (GOLD) and Newmont Goldcorp (NEM).

However, to be clear, the more cautious will leave the sector alone until Gold >$1400s and Silver >$21s. For now... it remains a case of broad chop since late 2016.