TheDailyGold Top 40 Index Update

The Top 40 index contains 28 gold companies and 12 silver companies. The median capitalization is currently $400 Million. It’s a good mixture of large (8 companies with near +$2 Billion capitalization) and small (17 companies below $300M capitalization).

The weekly candle chart is below. Click to enlarge to full size.

For the third week in a row the index should hold above key support at 260. The next resistance comes into play at 305-310. That is roughly 10% upside from Tuesday’s close of 280. Looking further out, 350 has been resistance a handful of times over the past 18 months.

At the bottom we plot an 8-week rate of change for the index. Over the past 2+ years it has twice rebounded 40% in 8 weeks and twice rebounded 30% in 8 weeks. A move to 350 from last weeks closing low (262) equates to a 34% advance. From the other view, a weekly close below 260 could start another breakdown.