Read the story here. Advertise at Before It's News here.
Profile image
By The Daily Gold (Reporter)
Contributor profile | More stories
Story Views
Last hour:
Last 24 hours:

Gold & Gold Stocks Weeks From Historic Bottom

% of readers think this story is Fact. Add your two cents.

Gold and Gold stocks have fallen to levels from which we should see excellent returns over the next 12 months and potentially spectacular over the long term. However, that does not mean a bottom and reversal are imminent. 

Concerning the gold stocks, the indicators are extremely oversold and have reached levels similar to the 2020 and 2018 bottoms.

You will rarely hear a technician say this, but whether markets make an oversold bounce or the actual bottom depends on fundamentals. Concerning precious metals, Fed policy changes have been quite significant. 

In late 2018, Gold and gold stocks rebounded and sustained gains around the time of the Fed’s last interest rate hike. The Gold breakout in 2019 occurred when the Fed cut interest rates for the first time in over a decade.

The Covid crash low occurred as the Fed cut rates to 0 and the market sensed massive fiscal stimulus and transfer payments. In 2008, the Fed cut rates to 0 a month before the October bottom.

I could go on but you get the point.

Gold and gold stocks are struggling because the market continues to anticipate rate hikes through the end of the year. When the market and economic outlook force the Fed to stop, Gold and gold stocks will rebound violently, if they remain extremely oversold as they are now.

Before we get to the breadth indicators, let us focus on price.

The weekly candle charts for GDX and GDXJ are below. 

After a nasty 12 weeks of decline, the miners are sporting bullish hammers. They could rally for at least a few weeks. 

The red lines show initial resistance targets, while the blue lines show strong support targets if this week’s lows did not mark the bottom.

A few days ago, 58% of GDXJ stocks made a new 52-week low. That is tied with the highest single-day mark of the past seven years.

Also, the percentage of GDXJ stocks trading above the 200-day moving average (smoothed by a 20-day average) is at the second-lowest level of the past seven years. 

Also, 59% of GDX stocks made a new 52-week low a few days ago. That was in line with the August 2018 and March 2020 lows data. 

Meanwhile, Gold has broken below support at $1780 and $1750. 

It has key support at the 40-month moving average ($1720) and a confluence of support around the 2021 lows at $1675. 

Technicals and sentiment indicators (which are not yet extreme) suggest Gold could easily fall and test those support levels. Perhaps that would coincide with a final selloff in the gold stocks.

The turning point for precious metals will align with or begin as the market senses a shift in Fed policy. Whether July or September is the last rate hike, I expect the turn to be in August or September.  

I continue to focus on finding high-quality juniors with at least 5 to 7 bagger potential over the next few years. 

Periodically I will publish and update a list for subscribers of my favorite stocks with at least 10-bagger potential. To learn the stocks, we own and intend to buy, with at least 5x upside potential after this correction, consider learning more about our premium service. 


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse


    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

    Load more ...




    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.