The gold stocks bounced strongly today after the February jobs report confirmed the Federal Reserve will hike interest rates next week. While precious metals rallied strongly following the previous two hikes, I’m not so sure today marks the start of a big rebound. For one, the Federal Reserve could hike rates again in July. Second … Continue reading “An Analog for the Gold Stocks Correction”

While we expected the gold stocks to correct and test GDX $22 and GDXJ $35, we did not expect it to happen so quickly. It literally took only three days! Gold stocks rebounded on Friday and managed to close the week above those key levels. While gold stocks could bounce or consolidate for a few … Continue reading “More Downside Potential in the Gold Stocks”

The early stages of Gold bull markets (this one included) are characterized by strong outperformance from the miners. They will lead the metals and turning points and register strong outperformance. We saw that in the early 2000s, late 2008 to early 2009 and we have seen it again over the past year. During the recent … Continue reading “Underperformance in Gold Stocks Argues for Interim Peak”

The January headline consumer price index (CPI) came in at 2.5%, which is near a 5-year high. What happened to deflation? As a result, real interest rates declined deeper into negative territory or in the case of the 10-year yield, went from positive to negative. No this isn’t a commodity-driven story. The core CPI (ex … Continue reading “Gold’s Fundamentals Strengthen”

The precious metals sector has reached the upside targets we’ve written about since the start of 2017. Gold has touched almost $1250/oz ($1246/oz high) while GDXJ exceeded our $41 target and GDX nearly reached $26. The glass half empty case is the sector is now at strong resistance levels and any immediate upside will be … Continue reading “Gold & Gold Stocks Hit Upside Targets. Now What?”

Gold has underperformed both in nominal and real terms. Last week it formed a bearish reversal in nominal terms and against foreign currencies. However, the good news for bulls is the US Dollar Index lost support at 100, due to the Trump administration’s tough talk against Germany (and the Euro). Couple that with no movement … Continue reading “Weaker US$ Could Send Gold & Gold Stocks to Higher Targets”

As Gold and gold mining stocks approach strong resistance, we wonder if the outcome will be a sharp selloff or a period of bullish consolidation. While there are a handful of things we can examine (sentiment, momentum, relative strength, etc), today we will focus on Gold and its relative strength against two key markets. How … Continue reading “Two Gold Ratios You Should Watch”

Gold and Gold stocks have rallied as expected and the consolidation in the miners in recent days looks bullish. GDX and GDXJ have digested the recent recovery quite well as Gold is testing resistance around $1200/oz. While the price action portends to more gains so does the breadth in the miners as well as short-term … Continue reading “Rally in Gold & Gold Stocks Has More Upside”

Although we expected a rally in the gold mining sector, we have been surprised by its strength and recent buying pressure. From the lowest ticks, Gold has rallied less than 6% but GDX has gained 25% and GDXJ has soared 36%. This rebound adds to the evidence that the gold stocks are leading the metal. … Continue reading “Gold Stocks Leading but Approaching Trump Resistance Levels”

Gold has suffered recently in the wake of higher real interest rates while the US Dollar, thanks to higher yields has reached a 14-year high. Stronger real rates hurt Gold but so does a stronger US Dollar, which remains the dominant global currency. In addition to falling real interest rates Gold likely needs the US … Continue reading “Surging US Dollar in 2017 a Catalyst for Gold Bottom”