Gold Is Tricky Now

While it seems logical that gold needs to rest, several stocks should cause us to question whether it will or not.

The charts below show gold’s rally and the rally of the Exchange Traded Fund GDX.

As the charts show, the gold miners, GDX are in need of a pullback and consolidation as they are extended and divergences are in place on the indicators.

However, under the hood of GDX we find five stocks that have not yet broken out but are right at resistance.  Specifically, AUY, IAG, BVN, CDE, and HMY all look like they want to move higher soon.

So despite divergences in place on GDX, it is possible that very little consolidation takes place before we surge higher.  Right now our view is defensive, but are prepared to re-buy if a breakout occurs. 
We shall see in the next few days what the ECB, BOJ and Federal Reserve say about interest rates that will trigger a breakout or pullback.