LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

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

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

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Technicals for Gold Miners Remain Weak


 -- Published: Monday, 27 March 2017 | Print  | Disqus 

By Jordan Roy-Byrne, CMT, MFTA

Last week we wrote that precious metals should see upside follow through but to be wary of the 200-day moving averages and February highs before becoming excited. The metals did follow through as Gold gained 1.5% and Silver gained 1.9% (for the week) but the miners disappointed. GDX gained only 1.1% while GDXJ finished in the red as did junior silver companies (SILJ). As spring beckons, the gold stocks are showing relative and internal weakness.

Two signs of weakness in the miners are visible in the weekly candle charts below. First, while Gold has already rallied back to its high the first week of February, GDX and GDXJ are down 11% and 15% respectively. The miners and the metals will not always be perfectly aligned but that is a rather stark divergence. Secondly, although Gold closed at the highs of the week in each of the past two weeks the miners failed to hold their gains. This is not exactly the type of price action that inspires more gains in the short term.  

Mar242017minerswk

Gold, GDXJ, GDX Weekly Candles

Gold stocks are also showing some internal weakness. In the chart below we plot the advance/decline (A/D) line for GDX and its bullish percentage index (BPI). Both are breadth indicators. The A/D line is the holy grail of leading indicators while I have found the BPI to be more of a confirmation or overbought/oversold indicator. At present, the A/D line is below both its 50 and 200-day moving averages which are flattening and soon to slope lower. That is ominous if the A/D line can’t regain those moving averages. Meanwhile, the BPI is only at 36%. This means it has room to move up but it also shows weakness as it has barely changed despite gains in recent weeks.  

Mar242017gdxinternals

GDX A/D Line, GDX BPI

Part of the cause of weakness in the gold stocks (and relative strength in Gold) is the weakness in the stock market which is actually a welcome and positive development for precious metals. As we discussed in a recent video, precious metals are currently setup to benefit from weakness in the stock market as they were in the 1970s and early 2000s. Patience is needed though as stock market weakness is not necessarily an instant or immediate catalyst for the gold stocks.  

The current weak technical action in the gold stocks is further evidence that precious metals are unlikely to see a blast off anytime soon. Gold could continue to rally on the back of stock market weakness but don’t expect that to pull miners much higher. I reiterate that at present it’s not wise to chase strength in the miners. Instead, traders and investors should be patient and wait for (presumably) lower prices and a better entry point. We continue to look for high quality juniors that we can buy on weakness and hold into 2018. For professional guidance in riding this new bull market, consider learning more about our premium service including our current favorite junior miners.

Jordan@TheDailyGold.com

Jordan Roy-Byrne, CMT, MFTA

 


| Digg This Article
 -- Published: Monday, 27 March 2017 | 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.