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:
And a matching chart in GDXJ:
That chart pattern is promising and matched by a bullish wick at support in the chart in gold futures.
Compare that with paper gold (GLD). Notice how this week’s action relates to support? It broke support and never recovered.
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.