Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Miners Arrived At Huge Resistance After An Incredible Rally

Commodities / Gold and Silver Stocks 2016 Apr 15, 2016 - 10:17 AM GMT

By: InvestingHaven

Commodities

Gold is definitely story of 2016, at least so far. The yellow metal rose some 25% in the first quarter. That rally was impressive, but the performance of precious metals miners was even better, as the rally of most gold miners surpassed 100%  in 2016. Incredible.

Is this the time to enter the gold mining space or stay on the sidelines?


Logically, after such a gold miners rally, every investor would argue that it is recommended to wait for a better entry point. However, that is a logic conclusion in theory, but it is very hard to accomplish in reality, as investors can easily get caught up in the frenzy of the market and the news stream like Bloomberg’s latest article on gold miners. In other words, emotions could lead investors to chase prices higher. That is called FOMO: Fear Of Missing Out.

The daily chart of the GDX mining index ETF, showing short term trends, tells us that this is not the time to become overly enthusiastic. The gold miners rally surpassed the June 2015 high, but a retracement started today. The market should do its work now, and investors should be patient.

Moreover, the weekly GDX ETF chart brings up an additional insight. Gold miners have reached a HUGE resistance level as seen on the next chart (red rectangle). That resistance level coincides with the consolidation area which started right after the collapse of 2013 and lasted until 2015. This is a resistance zone that should not be taken light right after a 100% rally in the last 3 months.

An additional data point which confirms the above observations is the outflow from the GDX ETF. According to Sentimentrader, “money has been leaving the gold miners. Through the week ended Tuesday, more than $300 million had been pulled from GDX despite a gain of more than 13%. There have been a few times that it lost more than $100 million in assets over a week that it gain more than 10% (2009-05-22, 2013-04-23, 2013-07-22, 2013-08-12, 2015-10-08 and 2016-02-04). They mostly led to gains over the next 1-2 weeks but losses over the next 1-3 months.”

In other words, this is not the time to enter the gold mining arena, but rather watch how the retracement unfolds. According to the pattern of the retracement, an entry point should be defined (or not).

--  NOTE: Subscribe to our free newsletter below and receive our quarterly outlook report with the most profitable investment opportunities. Our newsletter is sent twice per week.  

http://investinghaven.com

Analyst Team
The team has +15 years of experience in global markets. Their methodology is unique and effective, yet easy to understand; it is based on chart analysis combined with intermarket / fundamental / sentiment analysis. The work of the team appeared on major financial outlets like FinancialSense, SeekingAlpha, MarketWatch, ...

Copyright © 2016 Investing Haven - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in