A golden setup, Part 2
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In last week’s post, I discussed how silver and PM miners (XAU, GDX, SGDJ) had all hit major long-term support levels. One additional chart that belongs with this group is this gold chart:
We can see that on a long timeframe (6M candles), gold is retesting a 10yr base within a big uptrend.
StockCharts.com has a mean-reversion indicator for gold called BPGDM (Gold Miners Bullish Percent Index). It also suggests a low could be in for gold & the miners:
I mentioned in the previous post that while all these charts look bullish, gold miners have been the weakest sector of the market so we want to be careful and not catch a falling knife.
But this week, we got the trend confirmation we needed. GDX weekly chart is showing a failed breakdown.
Failed breakdowns are very bullish. We saw one in Bitcoin in July, and URNM in Aug. As we know, both made monster moves afterwards.
Finally, I want to point out that gold stocks on the more speculative TSX Venture exchange have stronger momentum than stocks in the major gold mining ETF’s. This can be seen in the two charts below, and is a sign of risk appetite within the sector.
Summary:
There are a lot of bullish developments in the gold space:
Gold, Silver and the PM miners (XAU, GDX, SGDJ) all hit major support in recent weeks.
BPGDM is in the zone that marks major bottoms in gold.
Speculative gold stocks on the Venture exchange have stronger momentum than the more established stocks found in gold mining ETFs. This is a sign of risk-on within the sector.
Most importantly, GDX is displaying a failed breakdown this week.
Thanks for reading.
Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.