Thursday 31 August 2023

Miners digging back down

The gold miner ETF of GDX saw a net August decline of -$2.15 (6.8%) to $29.26, pressured by a shaky equity market, and downside in gold and silver.

GDX, monthly



An intra month low of $27.27, but recovering to settle at $29.26. I would note the 10MA at $30.44, which was settled below. Monthly momentum ticked lower, and is prone to turning negative in September. 

The central concern should be that any downside in the main market would be a downward pressure on the miners. It doesn't necessarily mean they will be net lower, but it does mean they would be restrained to a considerable degree, even if gold/silver are net higher.

Three of the key miners...

Newmont (NEM), monthly 

Newmont saw a net August decline of -$3.50 (8.1%) to $39.42, a distinctly weak performance relative to the sector. I would note the monthly 10MA at $44.80, which was settled beneath. Monthly momentum subtly ticked back lower, and remains negative. Support $36s, with major upside resistance of the $45s.

Barrick Gold (GOLD), monthly


A net August decline of -$0.97 (5.7%) to $16.21. Momentum has turned fractionally negative. Support $12s, with upside resistance of the mid $19s.

First Majestic Silver (AG), monthly


A net August decline of +$0.54 (8.2%) to $6.13. A ninth consecutive settlement below the 10MA. I'd note the March 2020 low of $4.15... as appears an eventuality, assuming the main market breaks lower.

Of the three, yours truly favours Newmont, as it has less exposure to copper than Barrick. The bold will lean to the silver miners, but they would be especially vulnerable if the main market breaks lower.

As of end August 2023... I hold no miner stocks/options.  

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