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The title is not meant to declare that this time gold stocks are going to exercise the excellent risk vs. reward stance vs. the US stock market. But it is meant to declare that the stimulus for the recent out performance is much healthier than it was last summer, during the last bounce.
Recall that was a time when Russia was sending armor into Ukraine and the pom poms came out in the gold sector, as if geopolitics have anything to do with investment merit.
A combination of factors — oil & copper prices, sluggish wage growth, weakness in equities today — are pressuring 10-year Yield, which is now at 1.93%, or 10 bps below Friday’s Jobs Report recovery high.
Only a sharp rally above 2.03% will argue technically that Yield has put in a meaningful bottom in and around the 1.90% area.
Conversely, Gold, it is acting extremely well, given the constant headwind of a rising US Dollar (DXY) and otherwise growing deflationary perceptions.
Something is going on in the Gold market that is grinding it higher in an impressive display of relative strength.
My next optimal target zone is $1240-$1244. Key near-term support rests at $1218.00.
Originally published on MPTrader.com.
Just a heads up on what I’m seeing in gold right now via the GLD ETF. The charts speak for themselves.
4yr view
1yr 3mo view
Obviously, I’m not suggested a straight up moonshot, the line is just a target off the Inverse Head & Shoulders pattern. I don’t think they really mean anything as far as a target goes, but it does show a reversal of supply/demand in play which will lead to further short-covering.
I had an intermediate buy signal trigger on the gold miners a couple of days ago so here are some candleglance charts (that are optionable) showing some quick scribbles of what I mentally see on them when I look through them taking notes. Some of them have already had some major moves, but there are still plenty of opportunities that are still basing. But bear in mind that those charts that have already moved hold the strength vs their peers, so any pullbacks in the strong ones should be good long bets going forward. (click to enlarge). (more…)
