Visitors Now:
Total Visits:
Total Stories:
Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

These Charts Show Why Investors Should Be Bearish on Gold Miners

Saturday, October 29, 2016 7:49
% of readers think this story is Fact. Add your two cents.

(Before It's News)

gold-nuggetsFrom Jordan Roy-Byrne: You have heard it before from us and probably elsewhere. The miners lead Gold. We have seen this every major turn dating back 16 years and it can also be the case with respect to short and medium term trends.

While the precious metals sector has rallied over the past few weeks, the rally has been weak and the gold stocks relative weakness in recent days bodes negatively for the sector.

Consider the daily chart (below) and the overall performance from this past week. Gold gained $9/oz or 0.7% on the week but GDX and GDXJ lost 3.3% and 5.3% on the week. Silver gained 1.7% on the week while SIL lost 4%. More importantly, the gold stocks peaked seven sessions ago and are trading 4%-5% below that peak while Gold closed Friday at its highest level in October. This is not the type of action typical of a sustainable rebound.

oct282016pmdiv

Daily Candle Charts

As a result, we are looking for the gold stocks to trade lower and make an important low in the days or weeks to come. Two weeks ago we wrote of a confluence of downside support at GDX $22 and GDXJ $34-$35. The weekly candle charts below show very strong horizontal support targets a tad lower at GDX $21 and GDXJ $33. Roughly speaking, this indicates potentially 10% downside in GDX and 15% downside in GDXJ.

oct282016minersw

Weekly Candle Charts

Unless the gold stocks are suddenly able to rally above the highs from seven sessions ago, they figure to retest recent corrective lows and perhaps make new lows. However, lower prices should lead to an excellent buying opportunity. This correction could end up like the 2002 correction in terms of price and the 2001 correction in terms of time. We are currently hedged and will redeploy that cash when the buying opportunity comes.

This article is brought to you courtesy of The Daily Gold.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.