It is generally agreed that in a Gold Bull Market, the gold producers lead the way, by outperforming gold bullion. To examine this trend we visit Stockcharts.com and pull up a chart that compares mining stocks (GDX) to gold bullion (GLD).

This index bottomed in March and since then the miners have moved ahead of gold bullion. The first hurdle, at the 50DMA (blue line) was overcome in April. The next hurdle, at the 200DMA (red line), took several months, but it is now in the process of being ‘put in the rear view mirror’. The blue arrow points to the fact that for the past three days the daily range has been above the resistance. The supporting indicators (top and bottom of chart), are positive. A rise above the green arrow will convince a lot of investors that the gold sector is ‘the place to be’. The timing is likely to coincide with the resumption of trading, after the US July 4th Independence Day Holiday.

Featured is GNX the commodities index, with the gold price at the top. The green lines show the correlation between bottoms in this index and gold. A turnaround in gold is overdue.

This chart courtesy BMGbullionfunds.com shows June is a good time to buy gold and gold stocks.

Peter Degraaf is NOT responsible for your trading decisions. Please do your own due diligence.

By Peter Degraaf

Peter Degraaf is an on-line stock trader with over 50 years of investing experience. He issues a weekend report on the markets for his many subscribers. For a sample issue send him an E-mail at itiswell@cogeco.net , or visit his website at www.pdegraaf.com where you will find many long-term charts, as well as an interesting collection of Worthwhile Quotes that make for fascinating reading.

DISCLAIMER:Please do your own due diligence. Investing involves taking risks. I am not responsible for your investment decisions.

Peter Degraaf Archive

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

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.