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

Are Gold and Silver Stocks Breaking Out?

Commodities / Gold and Silver Stocks 2015 May 16, 2015 - 03:10 PM GMT

By: Jordan_Roy_Byrne

Commodities

There is some talk among traders about precious metals breaking out. Silver broke a trendline dating back to summer 2011 and will make its highest weekly close in more than three months. Gold will make its highest weekly close in three months and gold miners had a very strong week. However, do these moves really register as breakouts? Not quite yet say the charts.


First lets start with the miners. The weekly candle charts for GDX and GDXJ are shown below along with their 80-week moving averages (in blue) and lateral resistance (in red). For GDX and other indices, the 80-week moving average has perfectly defined bull and bear markets going back five years. If GDX can sustain this strength then it should test the 80-wma in the weeks ahead for the third time in the past 10 months. There is a major confluence of resistance at $22. Meanwhile, GDXJ could rally up to $30 or a bit higher before testing major resistance. Miners have more room to rally but there are no breakouts until they takeout their 80-week moving averages.

GDX Market Vectors Gold Miners NYSE

Meanwhile, both metals had strong weeks and will make their highest weekly close in several months. While Silver broke a downtrend line dating back to 2011, the real resistance figures to be around $19 where there is a confluence of resistance. For Gold, the confluence of resistance is around $1250. Ultimately, it is hard to see any major breakout in the metals until they surpass their January highs on a weekly or monthly basis. That would be a significant breakout.

$GOLD Gold - Spot Price (EOD) CME

The gold miners (because they peaked first and are extremely oversold) can certainly diverge and perform okay if the metals don't breakout. However, we get the sense that they won't perform really well until the market thinks the metals have bottomed. Note what happened during the 2000 to 2001 bottom. Gold against foreign currencies bottomed first followed by gold miners in Q4 2000. Note that after Gold bottomed at the end of Q1 2001, the miners surged by 60% in two months and took out that pesky 400-day moving average (equal to the 80-wma).

$HUI Gold Bugs Index - NYSE Arca INDX

While the immediate outlook looks constructive, the entire complex has a lot of work to do before we can get really excited. The miners could test their 80-week moving averages but it is unlikely they can advance farther unless the metals takeout their January highs. I'm skeptical metals will do that on this rebound as their relative performance is weak considering the big drop in the US$. The worst is likely over for the miners but if Gold can't reach or takeout its January high then the miners are at risk for remaining in the range they have been in for the past eight months. Until something changes, buying support and oversold conditions works better than chasing strength.

Consider learning more about our premium service including our current favorite junior miners which we expect to outperform in the second half of 2015.

Good Luck!

Email: Jordan@TheDailyGold.com
Service Link: http://thedailygold.com/premium

Bio: Jordan Roy-Byrne, CMT  is a Chartered Market Technician, a member of the Market Technicians Association and from 2010-2014 an official contributor to the CME Group, the largest futures exchange in the world. He is the publisher and editor of TheDailyGold Premium, a publication which emphaszies market timing and stock selection for the sophisticated investor.  Jordan's work has been featured in CNBC, Barrons, Financial Times Alphaville, and his editorials are regularly published in 321gold, Gold-Eagle, FinancialSense, GoldSeek, Kitco and Yahoo Finance. He is quoted regularly in Barrons. Jordan was a speaker at PDAC 2012, the largest mining conference in the world.

Jordan Roy-Byrne Archive

© 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