Home > Financial Ponzi, stock charts, technical analysis > Reversal in Gold Miners?

Reversal in Gold Miners?

Very interesting action in Gold Miners, and Junior Miners on Friday.  Commodities have been obliterated this year.  Gold and Silver, in particular, appear to be flirting with a major breakdown as they hit multi-year lows.  But a dramatic reversal on Friday afternoon (7/24) comes at an interesting spot in the charts of mining indexes.

The ETFs for both large gold miners (GDX) and junior gold miners (GDXJ) have placed bullish wicks at the bottom support of a multi-year falling wedges.  First, GDX:

2015-07-24-GDX_CHARTS

And a matching chart in GDXJ:

2015-07-24-GDXJ_CHARTS

That chart pattern is promising and matched by a bullish wick at support in the chart in gold futures.

2015-07-24-GC2_CHARTS

Compare that with paper gold (GLD).  Notice how this week’s action relates to support? It broke support and never recovered.

2015-07-24-GLD_CHARTS

Interesting. It’s particularly funny to me given that I feel physical gold and paper gold and in some ways ideologically opposite investments – i.e. in a systemic crisis where the price of gold skyrockets, the paper version will likely be worthless.

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  1. Draft
    August 5, 2015 at 12:39 pm

    What do you think has been going on with Gold Miners since then? Seems strange.

    • August 10, 2015 at 9:27 am

      Whatever it is, it is not a reversal (yet). That said, GDXJ is still sliding downward along the bottom support of a falling wedge. I have no strong conviction. It seems that commodities may fall through the fall (another floor). Since gold plays to slightly different concerns, I imagine it could hold up (or even rally) in commodity breakdown. I own some hard stuff and am interested in buying more at some point. I like the real stuff as an insurance policy, though I don’t particularly care for it as an investment.

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