Another look at gold

Ever since the failed breakout in SGDJ (Junior gold miners ETF) in early Jan, I’ve avoided the gold space. A couple days ago, I wrote a post saying we could possibly see another leg lower in gold. However, after spending some more time reviewing charts this weekend, I think there’s a lot of reasons to be building a position at current levels.

Metals

  1. Gold (in Yen), Quarterly. This first chart is to set the stage with an ultra-big-picture view. It shows that gold has been in a massive 2-decade bull market. The sideways action over the past 9 months is a healthy consolidation.

  1. SPPP, Weekly. Platinum & Palladium ETF. 1-year breakout within an uptrend. It helps that Commercial Hedgers (‘smart money’) have one of their largest net exposures to palladium in almost 20 years.

  1. GLD/TLT, Weekly. 6-year base breakout. Think of this as an inflation gauge.

Miners

  1. Gold Miners Index, Monthly. GDX hit major support back in Feb. I pointed this out last month and we’ve seen excellent follow-through since then. A lot of great technicians I follow caught the exact Feb low - kudos to them.

  1. XAU, Weekly. Beautiful 9-month channel breakout. This is the event I’ve been waiting for as discussed a month ago in this post.

  1. SILJ, Weekly. Junior Silver miners are setting up nicely.

  1. SBSW, Weekly. This is the largest platinum & palladium producer. It made a breakout last week within a very strong uptrend.

Bitcoin vs. Gold

Tuesday last week, I also wrote about how rotating out of crypto and into gold could be a great trade. With Bitcoin breaking down this weekend (after months of having negative momentum divergence), it looks like that rotation came earlier than I thought.


Important DisclaimerThis 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.