Gold versus Mining Stocks Using Graphs

The two www.stockcharts.com graphs reveal the action of both gold and the mining stocks. The graph on GLD covers the street tracks gold trust which is good as a proxy for gold and the GDX represents the miners of precious metals. GLD remains well above its 50 and 100 day simple moving averages, while GDX is now crossing its 50 moving average on an upward move and is well above its 200 day moving average. An upward crossing of a moving average, from a technical perspective is a positive sign which indicates a potential buying opportunity. Conversely, a movement down across a moving average indicates a potential selling time. It is well to watch the following movement of the item being followed.

The mining stocks have lagged well behind the movement in the precious metals. They have moved upward with the metals, but not nearly as significantly. Also, the downward moves have failed to be as violent. The GDX graph is signaling a buy at present. At times, we do get false buy signals. I bought a couple of days ago which was perhaps a bit early. Better too early than way too late.

The GLD graph shows the price to be well above the moving averages. This is an indication of a bull market movement. Remember that trends continue until they end. The upward trend seems to be well established, so we would expect future upward movement with occasional setbacks along the road. I expect that gold will move above $1000 this year, possibly very soon. The boys with their intervention as gold and silver move upward seem to be allowing ever higher plateaus to be reached and established.

Silver is currently 16.53 and gold is 903.10. We must continue to hang tough.

All is in the hands of the Sovereign God who loves and cares for His people in many wonderful ways. Study the scriptures to know Jesus Christ who alone offers salvation to we sinful men.

Best to each, Doug