Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold Gains While Stocks Struggle Higher
By: Chris Mullen, Gold Seeker Report

Itís Lose-Lose For The Fed And For Everyone
By: Dave Kranzler

From China, translated from the Chinese: 'GATA is not wrong'
By: Chris Powell

Michael Pento: Finally, Corporate Stock Buybacks Blow Up
By: John Rubino

The New Safe Haven: Gold Stocks!
By: Stewart Thomson

Stock Market Hangs on Edge of Very Big Cliff
By: David Haggith

Will gold and silver miners join the lawsuits against JPMorganChase?
By: Chris Powell

The Surprising Major Demand Factor That Drives The Gold Price
By: Steve St. Angelo

Why Do Investors Tolerate It
By: Keith Weiner

Watch This Chart to Get the Jump on the Fedís Big Announcement
By: Rick Ackerman

 
Search

GoldSeek Web

 
Miners Next Move: Breakout or Breakdown?


 -- Published: Friday, 8 August 2014 | Print  | Disqus 

By Jordan Roy-Byrne, CMT

 

Weíve been very bullish on the miners since January but became concerned recently with the poor technical action in the metals (specifically Gold). Last month the mining indices were very close to a major breakout yet couldnít punch through. This signaled that Gold could begin a deeper decline and the miners would be vulnerable. However, Gold failed to break below $1280 while the miners have continued to digest their early summer gains and hold support. In addition, Gold is showing increasing relative strength amid US$ strength and equity market weakness. If Gold continues to show this kind of relative strength in the weeks ahead then it raises the odds that the miners will break to the upside in September.  

 

Usually I prefer to focus on the miners as they lead the metals at key turning points. However, I want to present a few charts that focus on Gold. Below we plot Gold and Gold against foreign currencies (using the UDN ETF). We see that Gold is gaining strength against foreign currencies. Itís inches away from a five month high. Moreover, during recent weakness that chart never threatened its 200-day moving average which is starting to slope upward. Gold in US$ is not quite as strong but appears to be following the other chart which made its low in mid July.

 

 

 

Another very important ratio to watch is Gold against the S&P 500. These two markets have had a strong negative correlation since three years ago. Whenever equities perform well it puts pressure on Gold. For many years in the 1970s as well as 2000 through 2002, Gold performed well when equities did not. We need to remember that Gold is an anti-conventional type of investment or speculation. Gold has trended sharply lower in recent years against both equities and bonds. If inflation expectations rise, capital will move out of those conventional asset classes and Gold would definitely benefit.

 

In the chart below we plot gold stocks against the stock market as well as Gold against the stock market. The HUI/SPX ratio closed at a five month high today. If one looks at a very long-term chart theyíd conclude its possible the ratio made a double bottom in December and June. Meanwhile, the Gold/SPX ratio hit a three month high today. If that ratio advances beyond 0.75 then itís an undeniable trend change.    

 

 

 

Elsewhere, the gold and silver miners have held up well but remain in a consolidation. While they have bounced in recent days, odds favor more consolidation rather than an imminent breakout. Perhaps they touch resistance before pulling back. The miners, even in the bullish scenario probably need more time to consolidate and digest the very sharp gains from earlier in the summer.

 

 

 

 

Over the coming days and weeks Iíll be watching if Gold can push above $1320 and if it can maintain its relative strength against currencies, equities and commodities. (Gold is not far from a nine month high against commodities). In addition, I want to see the miners maintain strength against the metals. While Silver has been very weak, the silver stocks (SIL and SILJ) are at 18-month highs relative to Silver. 

 

This is a very interesting time for the precious metals complex which could be weeks away from a major breakout opportunity. Breakouts have often occurred in September so we should be patient. If the stocks break up out of their long bottoming formations then huge upside lies ahead and it will confirm that the sector is back in bull market mode. Investors wonít have to trade in and out of positions as much as they had to over the last 12 months. We are positioned with a bullish bias and ready to tweak that as we get more evidence and hints ahead of the next big move. We invite you to learn more about our premium service in which we highlight the best junior companies and trade and invest a real portfolio for subscribers benefit.

 

Good Luck!

 

Jordan Roy-Byrne, CMT

 


| Digg This Article
 -- Published: Friday, 8 August 2014 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.