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12 hours ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | May 25, 2024
Next Monday is Memorial Day, which is a holiday in the United States. NY Gold Futures closed today at 23345 and is trading up about 12% for the year from last year's settlement of 20718. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Presently, this market has been rising for 6 months going into May suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 24542 while it has not broken last month's low so far of 22491. Nevertheless, this market is still trading above last month's close of 23029.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. We have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23387 and support forming below at 23182. The market is trading closer to the resistance level at this time.
On the weekly level, the last important low was established the week of April 29th at 22852, which was down 3 weeks from the high made back during the week of April 8th. So far, this week is trading within last week's range of 24542 to 23263. Nevertheless, the market is still trading downward more toward support than resistance. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, The broader perspective, this current rally into the week of May 20th reaching 24542 has exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. We have seen a rally thus far from the last low of 22852 for the past 3 weeks. Only a break of that low would signal a technical reversal of fortune, however, the market remains strong at this time. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 22852. Resistance is to be found starting at 23402. Looking at this from a wider perspective, this market has been trading up for the past 3 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 17 months since the low established back in November 2022.
Critical support still underlies this market at 20030 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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1 day ago
Gold Mid-Tiers’ Q1’24 Fundamentals
By: Adam Hamilton | May 24, 2024
The mid-tier and junior gold miners in this sector’s sweet spot for upside potential recently wrapped up their latest earnings season. These fundamentally-superior smaller gold producers delivered big last quarter, reporting spectacular results. The potent combination of record gold prices, lower mining costs, and better production fueled some of their richest profits ever. Yet mid-tiers still remain way undervalued.
The leading mid-tier-gold-stock benchmark is the GDXJ VanEck Junior Gold Miners ETF. With $5.5b in net assets mid-week, it remains the second-largest gold-stock ETF after its big brother GDX. That is dominated by far-larger major gold miners, though there is much overlap between these ETFs’ holdings. Still misleadingly named, GDXJ is overwhelmingly a mid-tier gold-stock ETF with juniors having little weighting.
Gold-stock tiers are defined by miners’ annual production rates in ounces of gold. Small juniors have little sub-300k outputs, medium mid-tiers run 300k to 1,000k, large majors yield over 1,000k, and huge super-majors operate at vast scales exceeding 2,000k. Translated into quarterly terms, these thresholds shake out under 75k, 75k to 250k, 250k+, and 500k+. Today only one of GDXJ’s 25 biggest holdings is a true junior!
Its Q1 production is highlighted in blue in the table below. Juniors not only mine less than 75k ounces per quarter, but their gold output generates over half their quarterly revenues. That excludes streaming and royalty companies that purchase future gold output for big upfront payments used to finance mine-builds, and primary silver miners producing byproduct gold. But mid-tiers often make better investments than juniors.
These gold miners dominating GDXJ offer a unique mix of sizable diversified production, excellent output-growth potential, and smaller market capitalizations ideal for outsized gains. Mid-tiers are less risky than juniors, while amplifying gold uplegs much more than majors. Our newsletter trading books are now filled with fundamentally-superior mid-tiers and juniors, smaller gold miners which we’ve long specialized in at Zeal.
Mid-tier gold-stock outperformance accelerates as major gold uplegs mature, increasingly attracting more traders to bid up stock prices. That’s finally starting to happen again as gold-stock sentiment shifts back to bullish. Gold’s driving upleg has powered 33.2% higher at best since early October. The major gold stocks represented by GDX hit a new +44.5% highwater mark midweek, for meager 1.3x upside leverage to gold.
Historically major gold stocks tend to amplify material gold moves by 2x to 3x, with that upside leverage mounting later in uplegs. That process is underway, as since mid-February GDX’s gains have outpaced gold’s by 2.0x. The mid-tiers of GDXJ lagged their larger peers for much of this upleg, as traders hadn’t started warming to this sector. But GDXJ’s total upleg gains grew to 52.3% this week, pulling ahead of GDX.
This smaller-gold-stock outperformance should continue expanding on balance. Fundamentally-superior mid-tiers’ gains during major gold uplegs surge way ahead of the majors’, sometimes even doubling them! The longer gold and gold stocks rally, the more bullish speculators and investors wax on them, the more capital they deploy to chase those gains, the more mid-tiers’ stock prices accelerate way ahead of larger miners’.
For 32 quarters in a row now, I’ve painstakingly analyzed the latest operational and financial results from GDXJ’s 25-largest component stocks. Mostly mid-tiers, they now account for 66.0% of this ETF’s total weighting. While digging through quarterlies is a ton of work, understanding smaller gold miners’ latest fundamentals really cuts through the obscuring sentiment fogs shrouding this sector. This research is essential.
This table summarizes the GDXJ top 25’s operational and financial highlights during Q1’24. These gold miners’ stock symbols aren’t all US listings, and are preceded by their rankings changes within GDXJ over this past year. The shuffling in their ETF weightings reflects shifting market caps, which reveal both outperformers and underperformers since Q1’23. Those symbols are followed by their recent GDXJ weightings.
Next comes these gold miners’ Q1’24 production in ounces, along with their year-over-year changes from the comparable Q1’23. Output is the lifeblood of this industry, with investors generally prizing production growth above everything else. After are the costs of wresting that gold from the bowels of the earth in per-ounce terms, both cash costs and all-in sustaining costs. The latter help illuminate miners’ profitability.
That’s followed by a bunch of hard accounting data reported to securities regulators, quarterly revenues, earnings, operating cash flows, and resulting cash treasuries. Blank data fields mean companies hadn’t disclosed that particular data as of the middle of this week. The annual changes aren’t included if they would be misleading, like comparing negative numbers or data shifting from positive to negative or vice-versa.
The mid-tier gold miners’ overall Q1’24 performance again proved spectacular! These sweet-spot-for-upside smaller gold stocks slashed mining costs while boosting their production. Those strong operations combined with record prevailing gold prices fueled another massive per-ounce earnings jump, the fourth consecutive quarter of those! Last quarter was among the best mid-tiers ever reported, impressively bullish.
Production growth trumps everything else as the primary mission for gold miners. Higher outputs boost operating cash flows which help fund mine expansions, builds, and purchases, fueling virtuous circles of growth. Mining more gold also boosts profitability, lowering unit costs by spreading big fixed operational expenses across more ounces. But for the first time in eight quarters, the GDXJ top 25’s output shrunk!
They collectively mined 3,692k ounces of gold in Q1’24, which slipped 0.8% YoY. But that is due solely to composition changes among these elite ranks. Four stocks surged dramatically over this past year to enter the GDXJ top 25, displacing four other stocks. Among the ascenders is Aya Gold & Silver, a small silver miner that produces no gold. That elbowed Lundin Gold to 26th place, which mined 112k ounces in Q1.
Replacing a producer with a non-producer skewed overall output lower. Had LUG been included instead of AYA, the GDXJ top 25’s aggregate output last quarter would’ve climbed 2.2% YoY to 3,803k ounces! That’s pretty impressive, much better than the GDX-top-25 majors’ 0.6%-YoY shrinkage I analyzed in an essay on their latest results last week. But both these elite mid-tiers’ and majors’ production is still lagging.
Every quarter the World Gold Council publishes fantastic Gold Demand Trends reports, containing the best-available global gold supply-and-demand data. The recent Q1’24 edition revealed total worldwide mine production grew 4.4% YoY. The GDXJ top 25 would’ve even bested that if not for output shortfalls in just two of its larger producers, B2Gold and Endeavour Mining. But those were both expected last quarter.
BTG suffered a permitting delay for a sizable new gold project in Mali, so it has guided 2024 to midpoint production around 900k ounces. That would make for full-year shrinkage of 15.2%. But with that project and another new mine coming online in 2025, next year is already forecast to see production surge 21.1% to a record 1,090k-ounce midpoint. So this year is a temporary lull for B2Gold before growth resumes.
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6 days ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | May 19, 2024
• Following futures positions of non-commercials are as of May 14, 2024.
Gold: Currently net long 204.5k, up 4.9k.
Gold rallied for a second week in a row, up 1.8 percent this week. The mettle has been rallying since May 3rd when it ticked $2,285 intraday. As a matter of fact, this week represents a new closing high of $2,417 – just ahead of $2,414 recorded four weeks prior. Back then, gold had just printed a new intraday high of $2,449, which occurred on April 12th, but the session reversed hard to close at $2,361.
Kudos to gold bugs for having rallied the metal back to those highs. The action after that high lasting five weeks now qualifies for sideways congestion, giving the bulls another opportunity to break out.
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DiscoverGold
1 week ago
Gold Miners’ Q1’24 Fundamentals
By: Adam Hamilton | May 17, 2024
The major gold miners just wrapped up another quarterly earnings season, reporting great results. Sector unit profits continued blasting higher on stable production, lower mining costs, and record prevailing gold prices. Yet individually plenty of majors still struggled with rising expenses or lower output. So deploying capital in miners to leverage gold’s remarkable breakout requires handpicking fundamentally-superior stocks.
The GDX VanEck Gold Miners ETF remains this sector’s dominant benchmark. Birthed way back in May 2006, GDX has parlayed its first-mover advantage into an insurmountable lead. Its $13.9b of net assets mid-week dwarfed the next-largest 1x-long major-gold-miners ETF by nearly 28x! GDX is undisputedly the trading vehicle of choice in this sector, with the world’s biggest gold miners commanding most of its weighting.
Gold-stock tiers are defined by miners’ annual production rates in ounces of gold. Small juniors have little sub-300k outputs, medium mid-tiers run 300k to 1,000k, large majors yield over 1,000k, and huge super-majors operate at vast scales exceeding 2,000k. Translated into quarterly terms, these thresholds shake out under 75k, 75k to 250k, 250k+, and 500k+. Those two largest categories account for fully half of GDX.
GDX’s Q1 performance was poor, merely edging up 2.0% despite gold powering 7.6% higher. Normally the major gold miners amplify material gold moves by 2x to 3x, so their stocks should’ve surged 15% to 23% last quarter! Traders have been slow to warm to this sector, as it languished out of favor for years. Recent months’ euphoric stock-market bubble also overshadowed gold, stealing most of markets’ limelight.
But GDX’s dismal and super-anomalous 0.3x upside leverage to gold in Q1 has passed. Despite gold’s healthy and necessary high consolidation over this past month, the major gold stocks just hit a new upleg high mid-week. GDX has soared 39.2% since late February, amplifying gold’s parallel 17.4% gain by 2.3x! Already back into normal territory, the majors’ upside leverage to gold is dramatically mean reverting.
Gold’s recent nominal-record-high streaks are winning much-more bullish financial-media coverage, so traders are increasingly noticing and chasing. Q1’s earnings season had a great example, as the world’s largest gold miner Newmont reported its latest results. Despite that being the only gold stock included in the flagship S&P 500 benchmark index, normally institutional investors still don’t follow NEM enough to care.
Yet that day its stock rocketed 12.5% higher on that Q1 report! NEM’s gains dragged the entire GDX up a big 3.7%, despite gold only climbing 0.6% that day. But considered in proper comparable context, those Newmont Q1 results actually proved weak as I’ll explain below. Yet fund managers finally starting to pay attention to gold and gold stocks again flooded in anyway. Sentiment is definitely improving in this sector!
For 32 quarters in a row now, I’ve painstakingly analyzed the latest operational and financial results from GDX’s 25-largest component stocks. Mostly super-majors, majors, and larger mid-tiers, they dominate this ETF at 86.0% of its total weighting! While digging through quarterlies is a ton of work, understanding the gold miners’ latest fundamentals really cuts through the obscuring sentiment fogs shrouding this sector.
This table summarizes the operational and financial highlights from the GDX top 25 during Q1’24. These gold miners’ stock symbols aren’t all US listings, and are preceded by their rankings changes within GDX over this past year. The shuffling in their ETF weightings reflects shifting market caps, which reveal both outperformers and underperformers since Q1’23. Those symbols are followed by their current GDX weightings.
Next comes these gold miners’ Q1’24 production in ounces, along with their year-over-year changes from the comparable Q1’23. Output is the lifeblood of this industry, with investors generally prizing production growth above everything else. After are the costs of wresting that gold from the bowels of the earth in per-ounce terms, both cash costs and all-in sustaining costs. The latter help illuminate miners’ profitability.
That’s followed by a bunch of hard accounting data reported to securities regulators, quarterly revenues, earnings, operating cash flows, and resulting cash treasuries. Blank data fields mean companies hadn’t disclosed that particular data as of the middle of this week. The annual changes aren’t included if they would be misleading, like comparing negative numbers or data shifting from positive to negative or vice-versa.
A few weeks ago as this latest earnings season was just getting underway, I wrote an essay previewing likely Q1’24 results. I concluded “...the major gold miners will soon report fantastic Q1 results. Despite higher mining costs likely in the usual Q1 production ebb, record average gold prices will still make for fat unit profits.” That proved true, although digging into the actual quarterlies revealed some surprises like usual.
Production growth trumps everything else as the primary mission for gold miners. Higher outputs boost operating cash flows which help fund mine expansions, builds, and purchases, fueling virtuous circles of growth. Mining more gold also boosts profitability, lowering unit costs by spreading big fixed operational expenses across more ounces. The GDX top 25’s collective Q1 output slipped 0.6% YoY to 7,999k ounces.
That was the fifth quarter in row these major gold miners failed to grow their production. Operating at large scales, they simply can’t find enough new gold to overcome relentless depletion. These bigger gold miners really underperformed their smaller peers last quarter. According to the World Gold Council’s new Q1’24 Gold Demand Trends report, global gold mine production actually grew an impressive 4.4% YoY in Q1!
And the GDX top 25’s production would’ve been even worse if not for Newmont’s soaring 32.3% YoY to a huge 1,680k ounces! That’s the reason institutional investors bid up NEM’s stock 12.5% that day its Q1 results were released. While sounding amazing, that big growth is a short-lived merger boost. Newmont gobbled up Australian super-major Newcrest Mining for $16.8b last year, with that deal closing in early November...
* * *
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1 week ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | May 18, 2024
NY Gold Futures closed today at 24174 and is trading up about 16% for the year from last year's settlement of 20718. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Up to this moment in time, this market has been rising for 6 months going into May suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains in a bullish position at this time with the underlying support beginning at 23956.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. We have been generally trading up for the past 2 weeks from the low of the week of April 29th, which has been a move of 6.222%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 5 weeks ago. Still, this market is within our trading envelope which spans between 21048 and 24294. The broader perspective, this current rally into the week of April 8th has exceeded the previous high of 20832 made back during the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now. Looking at this from a wider perspective, this market has been trading up for the past 13 weeks which from a timing perspective warrants concern.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 17 months since the low established back in November 2022.
Critical support still underlies this market at 20030 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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1 week ago
US Gold (USAU) is Sitting on a Substantial Gold-Copper Opportunity
By: Barchart | May 16, 2024
Poised to become a 100,000+ ounce annual gold-copper producer with its 100% owned CK Gold Project in Wyoming, US Gold (USAU) is sitting on a substantial opportunity.
Located in Wyoming’s Silver Crown Mining District, CK Gold’s pre-feasibility study estimated 1.01 million proven and probable ounces of gold, and about 248 million pounds of copper. In addition, CK Gold has a pre-tax net present value of about $323 million with a net present value of 39.4% internal rate of return, with gold and copper prices at $1,625 and $3.25 respectively.
Breaking News: US Gold Was Just Issued a Surface Gold Mine Permit for its CK Gold Project
In early May, US Gold was issued a surface gold mine permit for the development of its CK Gold Project from the Wyoming Department of Environmental Quality.
"Having previously been granted the Industrial Siting Permit in June last year and now the Mine Operating Permit, we have cleared the major regulatory hurdles towards project development," CEO George Bee said.
“Work to meet final authorization for development is well underway. The remaining conditions are the approval of the reclamation bond which has already been submitted, the Wyoming Pollutant Discharge Elimination System permitting process, which is in the final stages of approval, and the WDEQ Air Quality Division permits, where technical work is under review. We remain on track to receive the necessary permits around mid-year, as per prior guidance,” he added.
Moving forward, the final detailed engineering and CK Gold Project development are expected to begin in the latter part of 2024. There’s also the potential to put the operation into production by 2026, as noted by the company.
And while CK Gold’s gold news is exciting, we can’t overlook the tremendous potential of US Gold’s potential 248 million pounds of copper.
CK Gold May Hold Enough Copper for a Million Electric Vehicles
With the potential for 248 million pounds of copper at CK Gold, US Gold could hold the key to global plans for renewable energy and electric vehicles.
According to the Copper Development Association, gas-powered cars need about 18 to 49 pounds of copper. Electric vehicles need as much as 183 pounds, with hybrids requiring more.
In addition, 248 million pounds of copper could create a good deal of stability for supply chains.
Also, with the current copper supply-demand issue, analysts at Citi are projecting that it could run 75% higher by 2025. Even Bank of America analysts forecast that the higher renewable energy targets would boost copper demand by an extra 4.2 million tons by 2030.
Some of its other projects include its Challis Gold Project in Idaho, and its Keystone Project, located on the prolific Cortez Gold Trend – which is considered to be one of the most highly prospective mineral trends.
And while all have substantial potential, CK Gold is its standout crown jewel at the moment.
US Gold’s Keystone Project Also Has Untapped Potential
Jumping back into US Gold’s gold story, the company’s Keystone Project is located on Nevada’s Cortez Trend, one of the most prolific gold mining trends and also home to some of North America’s biggest mines.
“The Keystone project is an under-explored, early-Tertiary, complex intrusive-centered, large gold-bearing hydrothermal system developed in domed permissive, lower-plate, carbonate host rocks. U.S. Gold Corp. has consolidated this entire prospective gold Cortez Trend district currently with 20 square miles of mineral rights control. This is the first time in history of the district that both the entire district has been consolidated by one company, and is being evaluated by systematic, comprehensive, model-driven exploration,” says US Gold.
Immediate term, the key to US Gold’s success is its crown jewel, the CK Gold Project.
With gold and copper prices at record highs, and more news from US Gold expected shortly, keep an eye on shares of USAU.
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2 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | May 11, 2024
• Following futures positions of non-commercials are as of May 7, 2024.
Gold: Currently net long 199.6k, down 4.6k.
Last Friday, gold bugs showed up at $2,285 – well before testing horizontal support at $2,240s. They built on that this week, as the metal rallied 2.9 percent to $2,375/ounce. This comes after two weeks of decline.
On April 12th, gold printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361. Friday’s intraday high of $2,385, in fact, kissed a falling trendline from that high. This resistance likely gives way in the sessions ahead.
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2 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | May 11, 2024
NY Gold Futures closed today at 23750 and is trading up about 14% for the year from last year's settlement of 20718. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. At the moment, this market has been rising for 6 months going into May suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains in a bullish position at this time with the underlying support beginning at 23479.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. We have been generally trading up for the past week from the low of the week of April 29th, which has been a move of 4.380%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 4 weeks ago. Still, this market is within our trading envelope which spans between 20767 and 23969. Immediately, this decline from the last high established the week of April 8th has been important Before, this recent rally exceeded the previous high of 20832 made back during the week of January 29th. Nonetheless, that high was actually lower than the previous high made the week of December 25th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23402. Additional support is to be found at 22491. Looking at this from a wider perspective, this market has been trading up for the past 12 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 17 months since the low established back in November 2022.
Critical support still underlies this market at 20030 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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3 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | May 4, 2024
NY Gold Futures closed today at 23086 and is trading up about 11% for the year from last year's settlement of 20718. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Immediately, this market has been rising for 6 months going into May suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Distinctly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23380 and support forming below at 22962. The market is trading closer to the support level at this time.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed lower. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 3 weeks ago. Still, this market is within our trading envelope which spans between 17100 and 27120. Immediately, this decline from the last high established the week of April 8th has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 20832 made back during the week of January 29th. Nonetheless, that high was actually lower than the previous high made the week of December 25th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 11 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 17 months since the low established back in November 2022.
Critical support still underlies this market at 20030 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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3 weeks ago
Gold’s Pullback and Miners
By: Adam Hamilton | May 3, 2024
After blasting higher in a remarkable breakout surge, gold is pulling back. Such mid-upleg selloffs are normal and healthy, rebalancing sentiment to maximize uplegs’ longevity. Gold’s pullback is naturally weighing on gold stocks, fueling some bearishness. But since they didn’t soar to extremely-overbought levels like gold, their downside leverage should prove modest. The gold miners could just consolidate high.
This is definitely atypical, as normally gold stocks amplify their metal. The leading GDX gold-stock ETF dominated by major gold miners tends to leverage material gold moves by 2x to 3x. During gold’s previous upleg from late September 2022 to early May 2023, it powered 26.3% higher. GDX’s parallel upleg in that span ran 63.9%, making for solid 2.4x upside leverage. This fundamental relationship holds in selloffs too.
Before today’s mighty breakout upleg was born, gold corrected 11.3% into early October 2023. GDX dutifully sold off in sympathy, plunging 27.7% in that span for typical 2.5x downside leverage. Examples of this are legion, ultimately driven by gold-mining earnings amplifying gold price trends. Traders expect the same during gold’s current pullback, as this relationship is thought to be ironclad. But today is rather unique.
A few weeks ago I wrote an essay on the overboughtness in gold and gold stocks. Then gold had just hit $2,374, its ninth nominal record close in just eleven trading days! Euphoria was really mounting then, so my contrarian conclusion wasn’t popular. “...gold is extremely overbought today, warning of high risks for a sharp selloff.” That necessary sentiment-rebalancing process has begun, but is moving in fits and starts.
Gold crested two trading days later at $2,388, and drifted sideways for a few more. Then gold was slammed 2.4% lower on no news on Monday the 22nd, spawning flaring bearishness. Later gold plunged another 1.9% this Tuesday to $2,292. That extended gold’s overall pullback to 4.0% across two weeks, material but not excessive. If gold stocks were behaving normally, GDX should’ve fallen 8% to 12% in sympathy.
Plenty of newsletter subscribers and consulting clients have been writing me worrying gold stocks are due for a sizable selloff. That’s rational based on gold-stock precedent. Yet during those same couple weeks since gold’s last interim high, GDX has actually edged up 0.3%! The gold stocks have been holding their own so far in gold’s pullback, consolidating high. And just one day earlier, they had been looking way better.
During the first nine trading days of gold’s pullback, it fell 2.2%. Amazingly GDX defied that to rally 5.3%! What kind of sorcery is this? Over 2/3rds of GDX’s counter-gold rally came on one trading day, where GDX shot 3.7% higher. That was fueled by the world’s largest gold miner’s Q1 results. Newmont’s stock rocketed 12.5% higher that day after reporting its production last quarter soared 32.3% YoY to 1,680k ounces!
Newmont has always been GDX’s largest holding, weighing in at 12.2% midweek. So one could argue GDX has resisted gold’s pullback mostly because of NEM’s output surge. That’s actually pretty bullish for gold stocks though, because for years hardly anyone even paid attention to gold-stock quarterlies. The fact enough investors were watching to catapult NEM sharply higher proves gold-stock awareness is growing.
But there’s a more-important reason gold stocks are likely to remain way more resilient in gold’s pullback than normal. I discussed this in depth several weeks ago in that overboughtness essay. That analyzed the following updated gold and GDX charts, which include my bespoke Relativity indicator. That divides prices by their 200-day moving averages, and charts the resulting multiples over time illuminating trading ranges.
Over the past half-year or so, gold rocketed vertical in a massive upleg to extremely-overbought levels. The resulting surging greed is why a rebalancing selloff is essential. But the gold stocks have greatly lagged gold’s advance, their parallel upleg staying anemic leaving GDX far from challenging materially-overbought levels. That left gold-stock sentiment fairly-bearish, so the miners have no need to sell off like gold.
After bottoming near $1,820 in early October, gold mean-reverted sharply higher embarking on a new upleg. That powered higher into early December, with gold achieving its first new nominal record close in 3.3 years. Gold had rallied a normal 13.8% in this upleg then, and subsequently mostly consolidated high into late February. There was a mild pullback from late December to mid-February, which grew to 4.2% at worst.
Throughout that entire early-upleg span, gold was nowhere near overbought. At most it merely stretched 6.6% above its 200dma. Relative to that key baseline, gold’s trading range in recent years ran from 0.90x on the oversold side to 1.15x on the high side. Gold hadn’t yet grown overbought by then simply because it hadn’t surged fast enough. Overboughtness happens when prices rally too far too fast to be sustainable.
But boy as March dawned that dramatically changed! After a top Fed official hinted at monetizing more US Treasuries, gold leapt higher. The resulting upside momentum drove gold’s remarkable breakout surge, which wasn’t fueled by gold’s normal drivers. Speculators weren’t flooding into gold futures, and American stock investors weren’t buying gold ETFs. Instead Chinese investors and central banks rushed in...
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4 weeks ago
Gold Miners’ Q1’24 Preview
By: Adam Hamilton | April 26, 2024
The gold stocks’ latest earnings season is just getting underway, and should prove fantastic. The miners are set to report their most-profitable quarter in years, primarily driven by much-higher gold prices. These companies have also mostly forecast holding the line on costs, helping earnings amplify gold’s breakout surge. This sector’s strong-and-improving fundamentals should increasingly attract back institutional investors.
For 31 quarters in a row now, I’ve painstakingly analyzed the latest results reported by GDX’s major gold miners. This VanEck Gold Miners ETF dominates this sector, commanding 28.9x the assets of its next-largest 1x-long major-gold-miners-ETF competitor! Right after every earnings season, I dig into the latest quarterly reports from GDX’s 25 largest component stocks including the world’s biggest gold miners.
Their new Q1’24 earnings season starts this week and runs until mid-May. Gold stocks listing in the US have 40 calendar days after quarter-ends to file their latest quarterlies with securities regulators. Up in Canada which is the epicenter of the gold-mining universe, that deadline is 45 days. After many years of digging into gold miners’ quarterly and annual reports, some key sector results are predictable in advance.
While gold mining is complex and challenging, gold-mining earnings are fairly simple. Profits are just the difference between prevailing gold prices and the costs of producing gold. So a great proxy for sector earnings subtracts the GDX-top-25 gold miners’ average all-in sustaining costs from quarterly-average gold prices. That reveals the major gold miners’ collective profits per ounce, illuminating key earnings trends.
While the cost side of this equation requires some estimates, gold prices don’t. The yellow metal surged a hefty 7.6% higher in Q1, as its remarkable breakout surge gathered steam. After a mild pullback in the first half of Q1 on a US Dollar Index rally, gold blasted higher in the second half. Fully 10 new nominal all-time record highs were achieved in March alone! That boosted last quarter’s average gold price to $2,072.
That proved the highest ever witnessed, way over Q2’23’s $1,978 and Q4’23’s $1,976. Q1’24’s superior average blasted 9.5% higher year-over-year from the comparable Q1’23! Gold-mining profits naturally leverage prevailing gold prices, growing much faster than their metal climbs. So 10%-better gold prices ought to translate into way-higher gold-mining earnings. Anticipating how high requires some estimates.
A big majority of GDX’s 25 largest component stocks provide guidance for expected production and all-in sustaining costs. But that is almost always for entire calendar years. In their recent Q4’23 results that I analyzed in depth in mid-March, these major gold miners averaged forecasting $1,334 AISCs in 2024. Subtract that from Q1’s record average gold prices, and that implies unit earnings running $738 per ounce!
Those would make for fat profits, the best the major gold stocks have reported since Q2’21. They would also be the fourth highest on record, after Q3’20’s $884, Q4’20’s $838, and Q2’21’s $744. If that played out, the GDX top 25’s unit earnings over the past four quarters would experience 1.2%, 93.8%, 42.3%, and 27.5% YoY growth! A projected $738 more than doubles their recent quarterly ebb of $321 in Q3’22.
But odds are Q1’s AISCs will come in higher than full-year-2024 guidances. Plenty of gold miners have forecast production weighted to the back-half of this year. Unit mining costs are inversely proportional to gold output, as more ounces produced to spread mining’s big fix costs across lowers AISCs. Some of 2024’s ramping production is due to new expansions and mines coming online later this year, but not all.
Overall gold-mining output is considered constant, but is actually varies between quarters. The World Gold Council publishes the best-available global gold supply-and-demand data quarterly in its excellent Gold Demand Trends reports. The new Q1’24 edition is due soon, but hadn’t yet been released as I penned this essay. That is super-anticipated to see where demand fueling gold’s breakout surge came from.
The WGC tracks worldwide gold mine production every quarter, and it isn’t steady. Over the last decade, quarter-on-quarter mined gold output in Q1s, Q2s, Q3s, and Q4s has averaged -8.4%, +3.7%, +6.1%, and +0.4%. Q1s are the weakest quarters of the year, seeing big production declines from Q4s! Then that output builds again in Q2s and Q3s before peaking in Q4s. There are several reasons behind this trend.
Like most of the world’s land masses, most gold mines are found in the northern hemisphere. Winter weather peaking in Q1s adversely impacts operations, ranging from bitter cold up north to heavy seasonal rains down south. Both reduce efficiencies of necessary chemical reactions in heap leaching commonly used to dissolve gold from ores. Q1s are also when mine managers get new maintenance and upgrade budgets.
So they often schedule plant maintenance early in years, further slowing outputs. Sometimes they take advantage of winter weather impeding mining operations to expand throughputs. With much of that done and temperatures warming, gold mines often really hum in Q2s and Q3s. All of my gold-mine visits have been in summer months, and it’s always amazing seeing the beehives of activity with ore being moved.
AISCs inversely mirror production, so they are generally higher in Q1s before falling in Q2s and Q3s. So the GDX top 25’s full-year-2024 AISC guidance of $1,334 per ounce is very likely to be exceeded in Q1. It’s impossible to predict how much, but it almost certainly won’t exceed 5% more. That would make for $1,400 Q1 AISCs, which would be the second highest ever after Q3’22’s $1,405. $1,400 is likely worst-case.
That would definitely erode Q1 unit earnings, pulling them down to $671 per ounce up 16.0% YoY. But even that is substantial growth, and would still rank as the sixth-best GDX-top-25 profits on record! My best guess is those Q1 AISCs average around $1,365, which would yield still-fat $707 unit earnings surging 22.1% YoY. The gold miners are certain to soon report fantastic profits on much-higher gold prices.
This ongoing massive earnings growth is super-bullish because gold stocks remain deeply undervalued relative to gold. This chart looks at GDX and its key technicals over the past several years or so. While gold is blasting to record highs in its remarkable breakout rally, the gold stocks continue to languish. That is because American stock investors distracted by the recent AI stock bubble haven’t started chasing gold yet.
Despite the gold miners’ phenomenal fundamentals, midweek GDX was merely drifting near $33. The major gold stocks were trading at similar levels over three years ago in March 2021, when gold was only averaging near $1,725. At this span’s highwater mark in mid-April 2022, GDX was challenging $41 while gold was around $1,975. So with gold running over $2,300 today, gold stocks should be a heck of a lot higher.
It’s not just their implied unit profits that are surging, but hard GAAP earnings. Plenty of major gold stocks are now trading at absurdly-cheap low-double-digit and even single-digit trailing-twelve-month price-to-earnings ratios! Sooner or later this sector’s unparalleled earnings growth and massive cash flows generated are going to attract institutional investors including funds. Their buying will catapult gold stocks far higher...
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4 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 27, 2024
• Following futures positions of non-commercials are as of April 23, 2024.
Gold: Currently net long 202.9k, up 968.
Gold is either healthily digesting its massive gains since last October or is on the way to unwinding the overbought condition it is in.
On the 12th, the metal printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361. This preceded a nearly parabolic move higher. Last October, gold bottomed at $1,824 and tagged $2,047 as recently as March 1st.
Since the peak two weeks ago, gold has acted tentative, with this week down 2.8 percent to $2,347/ounce. The weekly particularly is way overbought, and this raises the risk to a move lower toward near-term support at $2,240s. Worse, gold bugs will be forced to defend breakout retest at $2,080s, which the yellow metal broke out of in early March.
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4 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 27, 2024
This market made a new high today after the past 3 trading days. The market opened higher and closed higher. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 23644. Therefore, this market has rallied over the past 52 trading sessionsNonetheless, the market remains neutral on our system indicators.
This market has not closed above the previous cyclical high of 24488. Obviously, it is pushing against this resistance level.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Solely focusing on only the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23479 and support forming below at 23046. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply that a bounce is unfolding.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed lower. We are still trading neutral on the Weekly Momentum Indicators and this is a warning that initial support has been breached. This strongly implies we should pay close attention now to the Weekly Bearish Reversals. If we begin to elect Weekly Bearish Reversals, then we are dealing with a more sustainable near-term correction. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 2 weeks ago. Still, this market is within our trading envelope which spans between 16947 and 26879.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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1 month ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 20, 2024
• Following futures positions of non-commercials are as of April 16, 2024.
Gold: Currently net long 201.9k, down 496.
Last Friday, gold printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361. This behavior showed up after a vicious rally. Last October, the metal bottomed at $1,824 and tagged $2,047 as recently as March 1st. The Friday action could have set in motion a process of unwinding at least some of the overbought condition gold is in.
This week, gold did drop intraday Monday to $2,340 and that was it; the drop to the 10-day was bought, with the remaining four sessions just about trending higher all along the sharply-ascending average, ending the week up 2.2 percent to $2,414/ounce.
Non-commercials are in a wait-and-see mode, with net longs just north of 200,000 contracts in five of the last six weeks. They probably will start worrying if gold loses near-term support at $2,240s and most definitely if breakout retest at $2,080s fails. The yellow metal broke out of $2,080s early March.
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1 month ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 20, 2024
The NY Gold Futures has been in an uptrend for the past 2 days closing above the previous session's high. The broader rally has peaked with the last high established at 24488 back on 04/12 5 days ago. Up to now, we have not yet elected any Bearish Reversals from that high. Clearly, this high was formed after a rally of 42 days.
Currently, the market is trading in a neutral position on our indicators but it is trading strongly higher up some 2.35% from the previous session low. Our projected target for closing resistance for the next session stands at 24646, we need to close above that target to imply a further advance. Failure to even exceed this intraday warns that the upward momentum is starting to decline. Nevertheless, this session closed below our ideal projection for closing resistance warning that the market which stood at 24453 is forming a high. A break of this session's low of 23868 will warn that we have a potential temporary high in place.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Clearly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23792 and overhead resistance forming above at 24148. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply that a bounce is unfolding.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. Afterwards, the market bounced for 8 weeks reaching a high during the week of April 8th at 23217. Since that high, we have been generally trading down to sideways for the past week, which has been a sharp move of 4.434% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 19964 as it has fallen back reaching only 23402 which still remains 17.22% above the former low.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 1 week ago. Still, this market is within our trading envelope which spans between 16752 and 26568. The broader perspective, this current rally into the week of April 8th has exceeded the previous high of 20832 made back during the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. From a pointed viewpoint, this market has been trading down for the past week.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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1 month ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 13, 2024
• Following futures positions of non-commercials are as of April 9, 2024.
Gold: Currently net long 202.4k, down 4.8k.
After just about going parabolic since early March when gold broke out of $2,080s, there were signs this week that the current rally has come too far, too fast. A breather is due and should be healthy. This week, the metal ticked $2,449 intraday Friday but only to end the session at $2,374/ounce, still up 1.2 percent for the week.
Gold bugs need to pay attention to this week’s candle with a very long upper shadow. This has appeared after a vicious rally. Last October, gold bottomed at $1,824.
At some point, breakout retest at $2,080s will occur. But before that happens, gold bugs will probably try to defend nearest support at $2,240s.
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1 month ago
Gold, Miners Overboughtness
By: Adam Hamilton | April 12, 2024
Gold’s record-shattering breakout surge during the past six weeks has proven magnificent! Sustained momentum-chasing buying outside of normal channels has fueled these sharp gains, which gold miners’ stocks are increasingly leveraging. But such big-and-fast surges are leaving traders wondering if gold and gold stocks have rallied too far too fast. Resulting excessive overboughtness can force rebalancing selloffs.
Financial markets are forever cyclical, perpetually flowing and ebbing. Rallies are followed by pullbacks, uplegs by corrections, and bulls by bears. The primary force driving these cycles is herd sentiment, how traders feel about sectors. This popular psychology endlessly swings between greed and fear like a giant pendulum. Major toppings happen at the bullish end of its arc, and major bottomings on the bearish side.
Gold’s prevailing sentiment today is surprising. Between mid-February to early April gold has blasted 18.1% higher, with 7/8ths of those gains since March dawned. Those six weeks since have seen fully 16 new nominal record closes, 4/7ths of all trading days! Such a massive record-shattering breakout surge should’ve spawned widespread greed if not euphoria. Yet Western investors are still hardly paying attention.
The combined bullion holdings of the mighty American GLD and IAU gold ETFs are the best daily high-resolution proxy for Western investment demand. Since mid-February when gold’s last mild pullback bottomed at $1,991, those have actually slumped 1.5%. Gold’s full upleg born in early October has powered 29.2% higher at best, yet GLD+IAU holdings somehow suffered a shocking 5.2% draw in that span!
This is unprecedented, something I’ve never seen before in a quarter-century intensely studying and actively trading gold and gold stocks. Western investors remain largely indifferent to gold, enamored by this latest stock-market bubble. Recent months’ powerful gold upleg has apparently been fueled by major buying out of Asia, particularly Chinese investment demand. China has all kinds of economic problems.
Its stock markets have been mauled by a deepening secular bear in recent years. Confidence in Chinese stocks has been seriously damaged, with many government interventions failing to stanch the bleeding. The aftermath of a burst bubble in Chinese housing has also crushed real-estate prices. So investors looking for assets not exposed to China’s troubled economy have been flocking to gold, catapulting it higher.
Ethereal sentiment can’t be measured directly, it must be inferred. Normally how far prices stretch from key baselines reveals excessive herd greed or fear. Big-and-fast surges generate the former, while sharp plunges spawn the latter. Nearly two decades ago I created a trading system called Relativity to quantify this. It simply looks at prices relative to their underlying 200-day moving averages, actually as multiples of them.
Those 200dmas common in many price charts make fantastic baselines. They are dynamic, gradually evolving over time to reflect prevailing price trends and levels. Yet they still change slowly enough that any outsized price moves force big deviations away from them. To the upside and downside those reflect popular greed and fear respectively. Traders grow excited as prices blast higher but depressed as they tumble.
Midweek gold’s latest record close divided by that day’s 200dma yielded a Relative Gold or rGold multiple running 1.176x. In other words, gold was stretched 17.6% above its 200dma. Without context that is meaningless, but when charted over time Relativity multiples often form horizontal trading ranges. These flatten 200dmas to 1.00x, and then render all price fluctuations around them in constant-percentage terms.
This rGold chart superimposes normal gold prices and key technicals including that 200dma over those rGold multiples. To define Relativity trading ranges to help guide the extensive gold-stock trading in our subscription newsletters, I analyze the last five calendar years of data. The current Relative Gold range runs from gold being extremely oversold under 0.90x its 200dma to extremely overbought above 1.15x.
So gold stretched way up to 1.176x its 200dma midweek is well into that extremely-overbought territory! Other traditional overboughtness-oversoldness indicators concur, including the Relative Strength Index and stochastics. Per Relativity, gold hasn’t been this hugely overbought in 3.6 years since mid-August 2020. And paradoxically that comparison is both damning and encouraging, simultaneously bearish and bullish.
Back in mid-2020, a monster gold upleg skyrocketed emerging from March’s pandemic-lockdown stock panic. Gold soared a scorching 40.0% higher in just 4.6 months, shooting to a parabolic climax way up at an extraordinarily-overbought 1.260x its 200dma! And that stretching was even more extreme since that key baseline itself was rising sharply. Gold’s euphoric $2,062 peak then wouldn’t be bested for fully 3.3 years.
That 1.260x rGold extreme was a heck of a lot higher than today’s 1.176x. But back then surging from the latter to the former only took a couple weeks. When popular greed waxes extreme and traders rush to chase vertical gains, buying exhaustion quickly follows. Soon such frenzied parabolic surges attract in all-available near-term capital. Once all traders wanting to chase that big momentum are in, only sellers remain...
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1 month ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 13, 2024
This market made a new high today after the past 2 trading days. The market opened higher and closed higher. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 24488. Therefore, this market has rallied over the past 42 trading sessions. Nevertheless, this market remains well above all seven of our intial support levels. Meanwhile, this market's closing at this time has been the highest during this 42 day rally. This certainly warns that we can still see higher highs ahead from here. It will take a closing below 23506 to signal a decline is unfolding. This market is trading above our normal trading envelope which resides at 23549 suggesting it is strong and still in a breakout position. Moreover, this market is quite strong for now trading above all 8 technical support levels. Additionally, this market is very strong while our projected overhead resistance stands at 24687 and 24813.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Focusing on our perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23557 and overhead resistance forming above at 23845. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. So far, this week is trading within last week's range of 24488 to 23217. Nevertheless, the market is still trading downward more toward support than resistance. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 0 week ago. This market has made a new historical high this past week reaching 24488. Here the market is trading weak gravitating more toward support than resistance. We have technical support lying at 23792 which we are currently trading below implying the market is very weak. This infers that this level will now be resistance. Our Major Channel Support lies at 21446 and a break of that level would be a bearish indication for this market.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 3 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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trunkmonk
2 months ago
Years ago, before I cared or understood metals there was a few that constantly posted and talked about them. I used to laugh, then I listened, then I cared, then I understood, then I got in, they were right. What is going on now is just a generational cycle that has been delayed for a few years with debt to infinity and other meddling going on while dollar dies. It’s primed for once in a lifetime run like never before and I can go all day with proof.
Dummies everywhere, including left overs from 1987 era, don’t get it. There just self serving vestiges that want to be something they are not. The ones that did get it, are gone, retired, fishing, don’t need to be in it anymore. The crypto craze has done something to metals market that I didn’t understand until recently, which will make this cycle epic, to eclipse them all. I ain’t gonna explain or argue, I’ll let everyone do their thing. I may write a book on it, maybe.
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2 months ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 6, 2024
• Following futures positions of non-commercials are as of April 2, 2024.
Gold: Currently net long 207.3k, up 8k.
Gold bottomed at $1,824 last October. Friday, it ticked $2,350 intraday with a close of $2,345/oz – both new highs.
The rally shifted into a higher gear after the metal broke out of $2,080s, which was touched the first time in August 2020, early last month. At some point, breakout retest will occur. But the way the rally has unfolded, there is support before that happens, with the nearest at $2,240s.
Amidst this, non-commercials, who have been adding to net longs the last several weeks, could be tempted to show some aggression. If this scenario pans out, gold bears will be forced to wait before the overbought condition the metal is in gets unwound. The daily RSI closed this week at 82.7 and the weekly at 76.5.
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DiscoverGold
2 months ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 6, 2024
NY Gold Futures closed today at 23454 and is trading up about 13% for the year from last year's settlement of 20718. Up to this moment in time, this market has been rising for 5 months going into April suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 23500 while it has not broken last month's low so far of 20470. Nevertheless, this market is still trading above last month's high of 22569.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Distinctly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23019.
On the weekly level, the last important high was established the week of April 1st at 23500, which was up 7 weeks from the low made back during the week of February 12th. So far, this week is trading within last week's range of 23500 to 22491. Nevertheless, the market is still trading upward more toward resistance than support. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 23500 made 0 week ago. This market has made a new historical high this past week reaching 23500. Here the market is trading positive gravitating more toward resistance than support. We have technical support lying at 22800 which we are still currently trading above for now.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 7 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
2 months ago
Gold-Stock Upside Targets 2
By: Adam Hamilton | April 5, 2024
The gold miners’ stocks are building steam, enjoying mounting upside momentum with gold powering to nominal record highs. Speculators and investors alike are taking notice of this high-potential sector that has long been overlooked. Despite their recent surge, gold stocks remain very undervalued relative to the metal that drives their profits. Their technicals and fundamentals argue for much-higher stock prices ahead.
Over the past five weeks or so, gold has blasted higher in a magnificent breakout rally! It was born as March dawned when a top Fed official hinted at more quantitative-easing Treasury monetizations. Gold shot up 2.0% that day to its first nominal record close since late December, and has achieved a dozen more since. Midweek gold was challenging $2,300, and its total upleg since early October had grown to 26.3%!
Who could’ve seen this coming? Me. The very day after gold bottomed under $1,820, I wrote an essay on gold’s violent breakdown. My contrarian conclusion fighting universal bearishness was, “...gold’s latest plunge was driven by massive gold-futures selling, leaving speculators’ positioning exceedingly-bearish. These super-leveraged traders have probably about exhausted their capital firepower available for selling.”
“That guarantees huge mean-reversion short-covering buying is imminent, which will catapult gold sharply higher.” How high? While most other analysts were forecasting gold to keep grinding lower, I wrote “Yet gold can easily surge 20% to 25% out of excessively-bearish spec gold-futures positioning like today on stage-one and stage-two buying alone!” Those are respectively short-covering buying and long buying.
That’s exactly what happened, as I detailed in a late-February essay on gold futures being reloaded. But while gold has been the belle of the ball, gold stocks have acted like ugly stepsisters. At best since early October, the leading GDX gold-stock ETF has merely rallied 27.9%. That’s appalling, not even 1.1x upside leverage to gold! Normally GDX’s major gold miners tend to amplify material gold moves by 2x to 3x.
The gold stocks have languished and lagged their metal for a variety of reasons, which I explored in an early-March essay. The day before I wrote that one, GDX had plunged to $25.79 which was actually a little under its early-October low of $25.91! Major gold stocks had slumped 0.5% during a 4.8-month span where gold had surged 11.7% higher. While bearish market anomalies feel bad, they offer great opportunities.
Extreme disconnects never last long, soon mean reverting to restore normal relationships. Over the last five weeks or so, GDX has rallied a sizable 28.5% leveraging gold’s parallel surge by 2.2x. Naturally that is working wonders for sentiment, rekindling bullishness and attracting in more traders. As they chase these mounting gold-stock gains, this sector’s outperformance relative to its underlying metal will grow.
This chart looks at GDX technicals over the past few years or so. The last time I ran it in early March, this dominant sector benchmark was right at that anomalous pre-gold-upleg low. But gold stocks have started to surge with gold since, achieving some nice gains. Yet GDX is still only about halfway up into its secular uptrend, still having massive room to mean revert higher. Much bigger gold-stock gains are still coming.
Gold stocks remind me of a great Easter sermon my pastor just gave at church focusing on Thomas the Apostle. After Jesus was crucified, Thomas’s world came crashing down. He heard the impossible news of Jesus’s resurrection, but remained skeptical. John’s gospel records Thomas saying “Unless I see the nail marks in his hands and put my finger where the nails were, and put my hand into his side, I will not believe.”
Forever branded Doubting Thomas for that, he was more of a realist. He wanted some real evidence that Jesus had risen, and soon got it as Jesus visited and spoke with him. Right then Thomas believed, and went on to do many great works including spreading the gospel to India. Gold stocks have been out of favor so long they may as well be rising from the dead! So traders want hard evidence before believing this is real.
GDX surging nearly 30% in just over a month is starting to convince skeptics. The hardline bearishness on this sector that has festered for years is softening, with bullish green shoots sprouting up. In markets, buying begets buying. Traders lover chasing winners to ride their upside momentum. The higher and longer anything rallies, the more capital it attracts accelerating its gains. Doubt quickly transforms into belief.
Gold stocks’ violent upside potential has largely been forgotten in recent years. GDX has enjoyed some modest-to-decent uplegs since 2021, clocking in at +28.4%, +41.4%, +52.1%, and +34.4%. Those are alright, but nothing to write home about. Averaging 39.1% gains, they really weren’t compelling enough to overcome the challenges of contrarian trading. But go back just one more year, and everything changes...
* * *
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DiscoverGold
2 months ago
2 Stocks Surging as Gold Prices Hit Record Highs
By: Schaeffer's Investment Research | April 1, 2024
• Interest rate cut hopes are driving gold stocks higher
• GOLD and RGLD are both eyeing third-straight wins
Gold stocks are on the rise, with the yellow metal surging to a record high earlier today on the heels of February's personal consumption expenditures (PCE) price index, which was in line expectations and fueled hopes of interest rate cuts. In response, Barrick Gold Corp (NYSE:GOLD) and Royal Gold Inc (NASDAQ:RGLD) are on the rise today.
GOLD was last seen up 1.3% to trade at $16.85 -- its highest level since January. The security is on track for a third-straight gain, and has cleared a confluence of moving averages sitting above. The shares have added 18.4% in the last six months.
Call volume is today running at double the intraday average volume, with 43,000 bullish bets exchanged so far, compared to 8,175 puts. The most popular contract is the weekly 6/21 17-strike call.
RGLD is also higher, last seen up 0.8% to trade at $122.82, also heading for its third consecutive win and trading at its highest level since January. The stock toppled its 80-day moving average after spending most of 2024 underneath, and is now swinging above its year-to-date breakeven mark.
At the International Securities Exchange (ISE), Cboe Volatility Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), RGLD's 50-day call/put volume ratio of 4.99 sits higher than 97% of readings from the past year, showing calls being picked up at a much faster-than-usual rate.
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DiscoverGold
2 months ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | March 30, 2024
• Following futures positions of non-commercials are as of March 26, 2024.
Gold: Currently net long 199.3k, down 2.3k.
In a holiday-shortened week, gold rallied in all four sessions. By Friday, it surpassed the March 25th high of $2,225 to rally 3.6 percent for the week to $2,238, with the metal ticking $2,247/ounce. Last week’s potentially bearish gravestone doji has been negated.
Monday’s intraday low of $2,164 came just above horizontal support at $2,150s, which was the high from early December. The yellow metal has come a long way from last October when it bottomed at $1,824.
At some point, successful breakout retest at $2,080s is the path of least resistance – and probably healthy for gold bugs. Since August 2020, when $2,080s was hit the first time, rally attempts stopped at that price point several more times, including in March 2022 ($2,079), May last year ($2,085) and a few more times this year. The 50-day has now risen to $2,089.
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