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4 days ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | October 5, 2024
NY Gold Futures closed today at 26678 and is trading up about 28% for the year from last year's settlement of 20718. Factually, this market has been rising for 11 months going into October 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.
Solely focusing on only the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 26653 and overhead resistance forming above at 26947. The market is trading closer to the support level at this time. An opening below this level in the next session will imply a decline is unfolding.
On the weekly level, the last important high was established the week of September 23rd at 27087, which was up 16 weeks from the low made back during the week of June 3rd. Afterwards, the market bounced for 16 weeks reaching a high during the week of September 23rd at 26386. Since that high, we have been generally trading down to sideways for the past week, which has been a reasonable move of 2.307% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 23042 as it has fallen back reaching only 26462 which still remains 14.84% 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 27087 made 1 week ago. Still, this market is within our trading envelope which spans between 23206 and 27368. The broader perspective, this current rally into the week of September 23rd has exceeded the previous high of 25704 made back during the week of August 19th. This immediate decline has thus far held the previous low formed at 23042 made the week of June 3rd. 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 22 months since the low established back in November 2022.
Critical support still underlies this market at 23030 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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DiscoverGold
2 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | September 28, 2024
NY Gold Futures closed today at 26681 and is trading up about 28% 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. Currently, this market has been rising for 10 months going into September 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 27087 while it has not broken last month's low so far of 24038. Nevertheless, this market is still trading above last month's high of 25704.
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 moderately bullish currently with underlying support beginning at 26510 and overhead resistance forming above at 26894. 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 September 23rd at 27087, which was up 16 weeks from the low made back during the week of June 3rd. So far, this week is trading within last week's range of 27087 to 26386. 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 27087 made 0 week ago. This market has made a new historical high this past week reaching 27087. Here the market is trading weak gravitating more toward support than resistance. We have technical support lying at 26839 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 25445 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 21 months since the low established back in November 2022.
Critical support still underlies this market at 22840 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 weeks ago
Normally what would be gold investor inflow went to BTC during and after several Halvings, many are stuck either financially or mentally. they know nothing else. The rest of the world, maybe hundreds of million out of the 6 plus Billion not in the west, since its now wealthier then ever before per person excluding the rich and infamous. The world gets it, the west is toast, more accurately post toastie, as in hits the goal post and never the net anymore. the west is fried, beyond all reasoning, stuck in markets and crypto, while the rest of the world will be a part of the transition to real money because fiat is absolutely BK. The dollar is doomed and the US along with central banks around the world, have already begun to transition back to real money. It will be the Great world wide recession or depression, into a new monetary systems based on real money, gold and silver. everything else that makes it will have to have the capability to transfer into real money or it will fade away. US wants civil war or WWIII because they cannot navigate out of the mess they created. like a VP who was dictator over the border, failed over 10 million time, then 40 days before election decides to pretend to secure the border. ITs too late, game over in every way. All crypto that becomes a derivative of gold has a chance, the rest will swell up with moron retail investors then implode with absolute impunity.
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2 weeks ago
Gold Stocks Forge Higher
By: Adam Hamilton | September 27, 2024
The gold miners’ stocks are forging higher, just achieving their best levels in four years. While advancing, their upside progress has certainly been labored. Given gold’s monster upleg and dazzling record highs, gold stocks should be much higher. And their record profits and epic earnings growth sure support way-better stock prices. The main impediment is traders’ apathetic sector sentiment, but that is starting to shift.
The leading GDX gold-stock index has surged 7.2% at best this month, closing at $41.41 Tuesday. That proved major gold stocks’ highest levels in 3.9 years. And if GDX can best the $44.48 it hit a few months earlier in August 2020, we’d be looking at 11.7-year secular highs! Since early October 2023, this GDX upleg has powered up 59.8%. That’s trouncing broader stock markets, with the S&P 500 up 34.5% in that span.
With great performance like that over this past year, you’d think gold stocks would be growing popular. But they really aren’t. Mainstream investors still aren’t the least-bit interested in chasing this sector’s strong upside momentum. They’re still enamored with the AI stock bubble, which continues to steal all the market limelight. And contrarian investors like me who follow gold stocks are pretty disappointed in them.
Gold stocks are ultimately leveraged plays on the metal they mine. The gold-mining business heaps big additional operational, geological, and geopolitical risks on top of gold price trends. So gold stocks really need to outperform gold to justify deploying capital in them. Historically the major-dominated GDX has generally leveraged material gold moves by 2x to 3x. That kind of amplification makes gold stocks worth owning.
Unfortunately they’ve way underperformed long decades of precedent over this past year. GDX’s 59.8% upleg sounds good, but gold itself has enjoyed a monster 46.3% upleg in that timeframe! That means the major gold stocks have only clocked in with 1.3x upside leverage to their metal. At that usual 2x to 3x, this GDX upleg should already be up 93% to 139% given gold’s massive gains! Gold stocks are way behind.
That doesn’t mean they won’t catch up with gold, which can happen fast. Compared to the vast pools of stock-market capital, this contrarian sector is vanishingly-small. So even tiny shifts in capital flows can catapult gold stocks far higher in short order. During gold’s last 40%+ upleg cresting in August 2020, that last time GDX was higher, GDX had rocketed up 134.1% in only 4.8 months! Gold stocks aren’t out of the race.
After actively trading this high-potential contrarian sector publicly for a quarter-century now, I’ve seen plenty of times where gold stocks were mostly ignored. Sooner or later investors always return, resulting in huge gains. Doublings in under a year aren’t uncommon, gold stocks can really multiply wealth when they are running! Another doubling or more is coming as gold stocks mean revert way higher to reflect gold.
That will be driven by a major bullish sentiment shift, resulting from gold’s massive gains and impressive parade of nominal record highs. The gold miners’ colossal earnings generated at these high gold prices fundamentally justify way-higher stock prices. Before we delve into all that, this chart puts GDX technical action in recent years into perspective. The gold stocks’ latest secular high is marginal, they are forging ahead.
Interestingly despite vexingly lagging gold this past year, gold-stock doublings are still a thing. Since this secular gold bull was born in late September 2022, GDX has powered up 89.3%. That compares to gold’s +64.0% at best in that span, making for modestly-better 1.4x upside leverage. Yet driven by gold-stock sentiment, sector performance can turn on a dime. GDX would only need a couple months to fully catch up.
The dominant driver of gold-stock psychology is how gold is faring. And that is awesome right now, achieving five new record closes in August followed by another seven so far in September! Closing way up near $2,662 Tuesday, such fantastic gold levels were almost unimaginable just one year ago. The longer and higher gold rallies, the more investors and speculators will want to chase it including with gold stocks.
New record highs in particular fuel virtuous circles of buying. The higher gold goes, the more the financial media covers it and the more bullish their coverage gets. That elevates gold and by extension its miners’ stocks onto more investors’ radars, including fund managers. The more buying they do, the more gold and gold-stock gains mount. That generates more bullish commentary attracting in widening circles of investors...
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DiscoverGold
2 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | September 28, 2024
• Following futures positions of non-commercials are as of September 24, 2024.
Gold: Currently net long 315.4k, up 5.3k.
Gold rallied another 0.8 percent this week to $2,668/ounce but not before raising a caution flag. It touched $2,697 intraday Thursday before profit-taking began.
Last week, after five sessions of sideways action at $2,610s, gold broke out Friday; this followed a breakout in the prior week at $2,540s-50s after several unsuccessful attempts since mid-August. The metal has experienced a sustained rally from $2,305 this June, including an August breakout at $2,440s-50s after more than three months of sideways action.
This week’s shooting star candle probably is a warning that gold is ready for a breather. Immediate support lies at $2,610s, followed by $2,540s-50s and $2,440s-50s.
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trunkmonk
2 weeks ago
Breaking out, much much higher soon as some reset on Stoch and RSI. https://www.zerohedge.com/precious-metals/gold-priced-swiss-francs-finally-breaking-out
Goldman Commodity Traders: Gold Buying On Our Desk Has Been Relentless, And Silver Is Starting To Move Too
So, in light of the above, Goldman's commodity team reiterates its "long gold trading recommendation and our price target of $2,700/toz by early 2025" for three reasons:
My comment - They and others are losing control of the gold and silver paper market. Late to the party or CYA announcement to clients. Look here, don't look there.
We believe that the tripling in central bank purchases since mid-2022 on fears about US financial sanctions and US sovereign debt is structural and will continue, reported or unreported.
Fed rate cuts are poised to bring Western capital back into gold ETFs, a component largely absent of the sharp gold rally observed in the last two years. Since ETF holdings only increase gradually as the Fed cuts, this upside is not yet fully priced in.
Gold offers significant hedging value to portfolios against geopolitical shocks including tariffs, Fed subordination risk, debt fears, and recessionary risks. Our analysis suggests an additional upside of 15% in gold prices under a hypothetical rise in financial sanctions equal to the rise seen since 2021 and a similar upside if US CDS spreads widen by 1 standard deviation (13bps) amid rising debt concerns.
https://www.mintstategold.com/investor-education/cat/news/post/goldman-commodity-traders-gold-buying-on-our-desk-has-been-relentless-and-silver-is-starting-to-move-too/
The Last Stage of the Gold and Silver Breakout FINALLY Begins
DiscoverGold
1 month ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | August 31, 2024
• Following futures positions of non-commercials are as of August 27, 2024.
Gold: Currently net long 294.4k, up 3.2k.
Going into this week, gold went sideways at $2,540s-50s for six sessions. This continued this week before suffering a 1.3-percent tumble on Friday, losing 0.7 percent for the week to $2,528/ounce. This preceded last week’s spinning top.
Earlier, the metal posted a fresh record of $2,570 on the 20th. Before that, it went sideways at $2,440s-50s for more than three months before breaking out early this month. It is probable the yellow metal is headed for a breakout retest. Non-commercials do not seem much worried about a breach; they are net long gold futures the most since March 2020.
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DiscoverGold
1 month ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | August 31, 2024
Next Monday is Labor Day, which is a holiday in the United States. NY Gold Futures closed today at 25276 and is trading up about 22% 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 10 months going into September 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. 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 moderately bullish currently with underlying support beginning at 25198 and overhead resistance forming above at 25385. 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 August 19th at 25704, which was up 11 weeks from the low made back during the week of June 3rd. Afterwards, the market bounced for 11 weeks reaching a high during the week of August 19th at 25064. Since that high, we have been generally trading down to sideways for the past week, which has been a reasonable move of 1.704% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 23042 as it has fallen back reaching only 25266 which still remains 9.651% 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 25704 made 1 week ago. Still, this market is within our trading envelope which spans between 21978 and 26480. The broader perspective, this current rally into the week of August 19th has exceeded the previous high of 24884 made back during the week of July 15th. This immediate decline has thus far held the previous low formed at 23042 made the week of June 3rd. 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. Looking at this from a wider perspective, this market has been trading up for the past 6 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 21 months since the low established back in November 2022.
Critical support still underlies this market at 22840 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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DiscoverGold
1 month ago
2 Mining Stocks Cashing in on Gold's Shine
By: Schaeffer's Investment Research | August 29, 2024
• Interest rate expectations and encouraging economic data are keeping gold prices higher
• GOLD and NEM are both trading at or near multi-year highs
Gold prices are on the move again, solidifying gains after second-quarter gross domestic product (GDP) showed upwardly-revised growth. Combined with the near-certainty of an interest rate cut from the Federal Reserve at the central bank's meeting next month, the safe-haven asset has been flying high, up over 22% in 2024. Gold miners Barrick Gold Corp (NYSE:GOLD) and Newmont Corporation (NYSE:NEM) are enjoying the tailwinds as well.
Barrick Gold stock was last seen up 2.3% to trade at $20.31, just a chip-shot from its Aug. 20 two-year high of $20.88. The shares are up 14% year-to-date and have gained 22% this quarter alone.
Options seem to be affordably priced. The equity's Schaeffer's Volatility Index (SVI) of 29% ranks in the relatively low 18th percentile of its 12-month range, meaning options traders are pricing in low volatility expectations right now.
Newmont stock is 2.5% higher to trade at $53.13 at last check, and earlier hit a multi-year high of $53.30. The shares have carved out a channel of higher highs since briefly breaching $30 on Feb. 28, and are now up 30% in 2024.
While calls outpace puts on an absolute basis, Newmont's 10-day put/call volume ratio over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 98% of annual readings. This means puts have been getting picked up at a quicker-than-usual clip lately. Given only a slim 1.6% of NEM's total available float is sold short, some of this activity could be due to shareholders protecting paper profits against any unexpected downside risk,
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DiscoverGold
2 months ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | August 24, 2024
• Following futures positions of non-commercials are as of August 20, 2024.
Gold: Currently net long 291.3k, up 24k.
Gold trudged higher to yet another record in a spinning top week. The metal rose 0.3 percent to $2,546/ounce, with an intraday high of $2,570 on the 20th.
The yellow metal has gone sideways at $2,540s-50s the last six sessions. A possible breakout in the sessions ahead will open the door toward this week’s high, and that will decide which way gold goes near-term.
Earlier, the metal went sideways at $2,440s-50s for more than three months before breaking out early this month. Gold bugs should be fine as long as this breakout remains intact.
In the meantime, non-commercials are net long gold futures the most since March 2020.
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DiscoverGold
2 months ago
Gold Mid-Tiers’ Q2’24 Fundamentals
By: Adam Hamilton | August 23, 2024
The mid-tier and junior gold miners in this sector’s sweet spot for upside potential just finished reporting truly-spectacular quarterly results. Fueled by dazzling record gold prices and lower mining costs, smaller gold miners’ unit earnings skyrocketed to their highest levels ever. Those incredibly-rich profits have left mid-tiers even more undervalued relative to prevailing gold prices, portending massive catch-up rallying.
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 three of GDXJ’s 25 biggest holdings are true juniors!
Their Q2 outputs are 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 more than majors. So we’ve long specialized in the fundamentally-superior mid-tiers and juniors at Zeal, actively trading these smaller gold miners for a quarter-century now.
All 1,510 newsletter stock trades realized as of Q2’24 averaged +15.6% annualized gains, about double the long-term stock-market average! And that’s heading higher, after early August’s Japanic fear spike stopped out more trades with big realized gains. We’ve been refilling our newsletter trading books since, as gold-stock prices remain way too low relative to their phenomenal fundamentals at lofty prevailing gold levels.
GDXJ’s latest upleg has powered 59.2% higher at best over 9.4 months into mid-July. That’s still modest by historical precedent, and smaller gold miners’ gains really accelerate later in gold uplegs. The longer and higher gold climbs, the more bullish sentiment that fuels which attracts back traders to chase big gold-stock gains. Eventually a psychological tipping point is reached and that buying becomes self-feeding.
For 33 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 65.6% 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 Q2’24. 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 Q2’23. Those symbols are followed by their recent GDXJ weightings.
Next comes these gold miners’ Q2’24 production in ounces, along with their year-over-year changes from the comparable Q2’23. 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.
Weeks before Q2 earnings season even began, I predicted last quarter would prove gold miners’ most-profitable ever in a late-June essay on “Gold Miners’ Record Quarter”. But despite my high expectations, the smaller gold miners’ epic Q2 performances exceeded them! This still-mostly-unloved sector is firing on all cylinders. Yet the vast majority of traders remain unaware, leaving massive room to chase this bull.
The GDXJ top 25 experienced some major composition changes over the past year, with five smaller gold miners rocketing up into these elite ranks. All are mid-tier and junior producers, which usually have way-better fundamentals than streamers, royalty companies, and explorers. So GDXJ is becoming purer as traders bid better producers’ stocks much higher, increasing this ETF’s upside leverage to higher gold prices.
These GDXJ-top-25 stocks are mostly an expanded subset of the GDX-top-25 majors. I analyzed their new Q2 results in last week’s essay, which were also awesome yet still not as impressive as GDXJ’s. These GDXJ-top-25 stocks representing 65.6% of this ETF are also collectively weighted at 25.3% in GDX. GDXJ effectively lops off GDX’s nine largest holdings, which are mostly deadweight super-majors.
Those gigantic gold miners perpetually struggle to overcome depletion at the vast scales they operate. So their output generally shrinks, except for four quarters after expensive acquisitions. Their extensive stables of mines also tend to have higher costs, making for lower profitability. And because of far-larger market capitalizations, super-majors’ stocks are much harder to bid higher during major gold uplegs.
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 GDXJ top 25 eked out 0.4%-YoY output growth to 2,937k ounces in Q2.
While small, that extended mid-tiers’ production-growth streak to eight of the last nine quarters! That’s quite impressive, especially compared to the GDX majors’ overall output sliding lower for six quarters in a row now. The big composition changes in GDXJ’s upper ranks didn’t affect that comparison much. Also in the comparable Q2’23, South Africa’s Harmony Gold and China’s Zhaojin Mining hadn’t reported results yet...
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DiscoverGold
2 months ago
Gold Miners' Performance vs. Gold -- Does It Say Sell Gold?
By: Carl Swenlin | August 22, 2024
In Monday's DecisionPoint Trading Room video, we were asked why we cover Gold Miners (GDX) as well as Gold (GLD). There are two reasons:
1. Some people prefer to own the commodity, Gold, and others prefer to own an operating company that benefits from the price of Gold, such as Gold Miners. For a profitable mining company, when Gold increases in value, most of the increase goes straight to the bottom line because cost of goods is already paid for.
2. Other people prefer Gold Miners because they may pay a dividend, and typically they out-perform Gold by a lot. That applies to movement in both directions. That is to say, Gold Miners will typically go up faster than Gold, but Miners also go down a lot faster than Gold.
This morning, I heard a money manager who asserted that people who own Gold should be selling it because, while Gold has been making all-time highs, Gold Miners need to advance another +50% to equal its 2011 all-time highs. The chart confirms that, but there is more to consider in this regard.
Here is a performance chart comparing the two from the 2011 top to the present, and we can see that GDX has underperformed GLD by about half.
But let's look at just the decline from the 2011 top to the 2015 lows. We can see that GDX fell at an accelerated rate, driven by the negative sentiment associated with GLD's decline.
The chart showing the performance from the 2015 lows shows that GDX has out-performed GLD by a lot, as we would expect; however, GDX took a -45% hit in 20 because of the securities bear market. Also, GLD had a rather tedious two-year sideways episode in 2020 to 2022, which would have been uninspiring to potential Miners investors. Nevertheless, GDX is still out-performing GLD by a considerable amount.
Conclusion: While the assertion that GDX underperformance since the 2011 all-time high justifies avoiding Gold, I think the premise does not consider all the evidence. Most important was the 2022 hit, which drove GDX down over -2.5 times more than GLD. That had less to do with Gold's prospects than it did with general bear market panic.
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DiscoverGold
2 months ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | August 17, 2024
• Following futures positions of non-commercials are as of August 13, 2024.
Gold: Currently net long 267.3k, up 28.5k.
Gold rallied 2.6 percent this week to a new closing high of $2,538/ounce, with an intraday high of $2,548.
Earlier, the metal went sideways at $2,440s-50s for more than three months before breaking out early this month. As long as gold bugs are able to defend this level, the ball remains in their court.
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DiscoverGold
2 months ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | August 17, 2024
NY Gold Futures closed today at 25378 and is trading up about 22% for the year from last year's settlement of 20718. Factually, this market has been rising for 9 months going into August 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 25483 while it has not broken last month's low so far of 23274. Nevertheless, this market is still trading above last month's high of 24966.
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.
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 25173.
On the weekly level, the last important high was established the week of August 12th at 25483, which was up 10 weeks from the low made back during the week of June 3rd. So far, this week is trading within last week's range of 25483 to 24627. 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 25483 made 0 week ago. This market has made a new historical high this past week reaching 25483. Here the market is trading positive gravitating more toward resistance than support. We have technical support lying at 24996 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 1 week 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 20 months since the low established back in November 2022.
Critical support still underlies this market at 22480 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 Miners’ Q2’24 Fundamentals
By: Adam Hamilton | August 16, 2024
The major gold miners just reported their best quarterly results ever! Record gold prices combined with lower mining costs catapulted unit earnings to dazzling new records. Yet despite exploding profitability, gold stocks continue to lag gold’s mighty upleg. This anomaly won’t last, as investors increasingly realize how seriously undervalued this sector remains. The resulting capital inflows will drive gold stocks way higher.
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 $14.0b of net assets mid-week dwarfed the next-largest 1x-long major-gold-miners ETF by nearly 25x! 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 nearly 4/7ths of GDX.
While GDX’s overall Q2’24 performance remained weak, it is improving. Last quarter this leading gold-stock ETF climbed 7.3% on a 4.7% gold rally, for 1.6x upside leverage. Normally the major gold miners of GDX amplify material gold moves by 2x to 3x. With gold and gold-stock gains mounting, traders are starting to take notice. In Q1 GDX had only edged up 2.0% on a 7.6% gold surge, for dreadful 0.3x leverage.
As a little contrarian sector usually overlooked, gold stocks have to achieve amazing feats before they win investors’ respect and capital. So they tend to underperform earlier in gold bulls, but way outperform later once they are well-established. Gold’s latest upleg has already powered up into mighty territory, rallying a massive 35.8% at best since early October! Gold just achieved its latest nominal record of $2,472 this week.
Gold’s hefty gains have certainly driven GDX higher, with its own upleg climbing 51.6% at best within this same span. But so far that has only amplified gold a still-anemic 1.4x, which is unusual well into a major gold upleg achieving new record-high streaks. The gold stocks remain fantastic buys relatively late in gold’s powerful run thanks to this unsustainable anomaly. Past precedent agues way-bigger gains are coming.
Gold’s last two uplegs attaining new records both crested in 2020, averaging monster 41.4% gains. GDX leveraged those by a good 2.5x, averaging 105.4% gains during them! Yet major gold stocks are up less than half that in today’s similarly-mighty gold upleg. They’ll catch up, so gold stocks remain a heck of an opportunity. Their glorious record Q2 results should really up sector interest among institutional investors.
For 33 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 87.5% 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 Q2’24. 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 Q2’23. Those symbols are followed by their current GDX weightings.
Next comes these gold miners’ Q2’24 production in ounces, along with their year-over-year changes from the comparable Q2’23. 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.
At the end of June a few weeks before Q2’s earnings season even started, I wrote an essay called “Gold Miners’ Record Quarter”. I concluded then “...gold miners will soon report a record quarter. ... Amazingly major gold miners’ average Q2 profits are now tracking over an unprecedented $1,000 per ounce.” That indeed came to pass, well exceeding even my high expectations of “awesome unit profits of $1,013 per ounce!”
Before we get to the fantastic news, the major gold stocks’ Q2 output disappointed. 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.
Ominously the GDX-top-25 gold majors’ collective production plunged 7.8% YoY to just 7,465k ounces last quarter! That drop was the second-worst in this research thread, to the lowest levels seen in its entire long 33-quarter span! These elite gold miners way underperformed their smaller peers, as the World Gold Council’s comprehensive Q2 gold supply-and-demand data showed global mining output climbing 3.3% YoY.
Thankfully this is all due to lazy quarterly reporting. GDX includes super-major and major South African and Chinese gold miners. The former report in half-year increments, but on a more-relaxed schedule than American and Canadian gold miners. The latter only haphazardly report in English, and when they deign to their scant results can be delayed for many months. Q2’24 reporting proved even worse than usual.
South Africa’s Gold Fields didn’t release any Q2 results as of mid-week, which is atypical. Normally it at least publishes quarterly updates by now, if not full half-year results. GFI’s management has probably been distracted by their new buyout of Canada’s Osisko Mining, to consolidate ownership in a great gold deposit they jointly own. South Africa’s Harmony Gold’s fiscal year ends in Q2, so that report is always later.
China’s Zijin Mining and Zhaojin Mining haven’t reported any Q2 results yet either. Occasionally they put out something in the normal quarter-end reporting window, but mostly not. In the comparable Q2’23, the super-majors Zijin and Gold Fields had reported mining 1,091k ounces. But Zhaojin and Harmony had not issued any quarterly results yet back then. Excluding all four makes for a much-better annual comparison...
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DiscoverGold
2 months ago
Gold Mining Stock Barrick Gold (GOLD) Shines After Top-Line Beat
By: Schaeffer's Investment Research | August 12, 2024
• Barrick Gold is on track for its best single-session of 2024 after the miner's earnings
• GOLD calls are flying off the shelves today, with an emphasis on August and September
Gold prices will be worth watching this week both before and after consumer price index (CPI) data is released for July. The safe-haven asset has stabilized in the wake of last Monday's shock selloff, and one mining stock is powering higher today.
Barrick Gold Corp (NYSE:GOLD) is near the top of the New York Stock Exchange (NYSE) this morning, last seen up 4.9% to trade at $18.26. The Canada-based gold miner reported adjusted second-quarter earnings of 32 cents per share on $3.16 billion in revenue, both of which topped analyst estimates.
Thanks to today's pop, which has the stock on track for its best single-session gain since Dec. 13, GOLD has reclaimed its year-to-date breakeven level. The shares have tacked on 34% since their Feb. 14 annual low of $13.76.
Call traders are coming out of the woodwork. In just the first hour of trading, over 23,000 calls have changed hands, volume that's five times the average intraday amount and 13 times the number of puts traded. The September 19 call is the most popular, followed by the August 18 call that expires at the end of this week.
The bullish skew toward Barrick is echoed by analysts and short sellers. The majority of analysts rate GOLD a "buy" or better, with zero "sells" on the books, while a slim 0.8% of the stock's total available float is sold short.
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DiscoverGold
2 months ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | August 10, 2024
• Following futures positions of non-commercials are as of August 6, 2024.
Gold: Currently net long 238.7k, down 7.9k.
The week produced a bit for both the bulls and bears. In a volatile session Monday, gold fell as low as $2,404 and remained under prior resistance at $2,450s the next two sessions but only for gold bugs to show up in the remaining two sessions to end the week up 0.15 percent to $2,473/ounce.
Gold is under last Friday’s record $2,488 but at the same time closed above $2,450s. Near-term, odds favor the bulls, with the caveat that non-commercials with sizable long exposure continue to reduce their holdings, albeit at a measured pace.
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DiscoverGold
2 months ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | August 10, 2024
NY Gold Futures closed today at 24734 and is trading up about 19% for the year from last year's settlement of 20718. At the moment, this market has been rising for 9 months going into August 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 25225 while it has not broken last month's low so far of 23274. Nevertheless, this market is still trading above last month's close of 24730.
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 24595 and overhead resistance forming above at 25225. 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 July 29th at 25225, which was up 8 weeks from the low made back during the week of June 3rd. Afterwards, the market bounced for 8 weeks reaching a high during the week of July 29th at 24145. Since that high, we have been generally trading down for the past week, which has been a sharp move of 4.705% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 23042 as it has fallen back reaching only 24038 which still remains 4.322% above the former low.
When we look deeply into the underlying tone of this immediate market, we see it is cautiously starting to weaken as even the stocastics are weakening especially since last week was a highImmediately, this decline from the last high established the week of July 29th has been important Before, this recent rally exceeded the previous high of 23826 made back during the week of June 17th. Nonetheless, that high was actually lower than the previous high made the week of May 20th 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 23042 made the week of June 3rd. 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 23957. Additional support is to be found at 23274. 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 20 months since the low established back in November 2022.
Critical support still underlies this market at 22480 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.
DiscoverGold
DiscoverGold
2 months ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | August 3, 2024
NY Gold Futures closed today at 24698 and is trading up about 19% for the year from last year's settlement of 20718. As of now, this market has been rising for 9 months going into August 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 25225 while it has not broken last month's low so far of 23274. Nevertheless, this market is currently trading below last month's close of 24730.
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.
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 24583 and overhead resistance forming above at 24745. 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 July 29th at 25225, which was up 8 weeks from the low made back during the week of June 3rd. So far, this week is trading within last week's range of 25225 to 24145. 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 weak posture. This market has made a new historical high this past week reaching 25225. Here the market is trading positive gravitating more toward resistance than support. We have technical support lying at 24340 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 1 week 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 20 months since the low established back in November 2022.
Critical support still underlies this market at 22480 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 Tipping Point
By: Adam Hamilton | August 2, 2024
The gold miners’ stocks look to be nearing a crucial psychological tipping point. After years of mostly being ignored, this small contrarian sector seems on the verge of roaring back into favor. When gold stocks grow popular and traders increasingly chase them, their gains grow massive. More than doubling in individual uplegs isn’t unusual, and total bull-market returns can easily exceed an order of magnitude.
For a quarter-century now, I’ve been studying, trading, and writing newsletters primarily about gold and its miners’ stocks. Since 2000 I’ve penned 1,132 of these weekly web essays, 1,107 weekly subscription newsletters, and another 289 monthly subscription newsletters! The latter two have recommended and closed fully 1,510 individual mostly-gold-stock trades, which have all averaged 15.6% annualized realized gains.
That’s a great record spread across 25 years, roughly twice the long-term stock-market average! The key to that is staying informed, always following gold stocks no matter how they are faring. That’s the only way to consistently buy lower then later sell higher. Sadly the vast majority of traders miss most opportunities because they only pay attention when sectors are hot, after big gains have already been won.
That natural human tendency has been the most-frustrating part of the newsletter business for me. The most-important times for traders to be interested in gold stocks are when they are beaten-down and deeply out of favor. Those are the best buy-relatively-low opportunities, the easiest times to multiply wealth. Yet around those pivotal lows, interest and sales wither as bearishness reigns and traders capitulate.
Gold stocks’ last couple major lows weren’t long ago, early October 2023 and late February 2024. Then the leading GDX gold-stock ETF and benchmark plunged to just $25.91 and $25.79. I pounded the table on the incredible opportunities in this sector around both lows, and we filled our newsletter trading books with cheap fundamentally-superior mid-tier and junior miners. Only diligent traders paying attention participated.
That latest week languishing gold stocks bottomed, I wrote a whole essay explaining why that was such a fantastic buying opportunity in late February. Traders need to stay informed and engaged when sectors are unloved and deeply oversold after just selling off substantially. That’s why I’ve subscribed to excellent financial newsletters covering various sectors since high school, and later went into this business myself.
Staying abreast of markets professionally requires great expertise painstakingly forged over decades of full-time work. Few analysts attain this to greater degrees than seasoned newsletter writers. Rather than putting in all that work myself for other sectors, I can reap their experts’ awesome wisdom in little time for trivial subscription fees. But newsletters are only valuable if you consistently digest them through all cycles.
On the last day of February my essay concluded “Excessive selling has slammed GDX way back down to early-October levels when today’s gold upleg was born. Yet that makes zero sense fundamentally with gold remaining about 12% higher. These seriously-oversold gold stocks riddled with capitulatory bearishness is an anomaly that will prove short-lived. They are due to soon mean revert sharply higher with gold.”
Naturally that proved correct, as you’d expect after a quarter-century of studying a sector. Over the next 4.6 months into mid-July, GDX blasted 52.3% higher. Our newsletter trades added around those lows have fared even better, with unrealized gains running as high as 97.2% then! There’s no magic in that, just time on task. The more years anyone devotes to studying anything, the more their knowledge on it grows.
Our innately-human herd psychology works alike across all markets, from mega-cap tech stocks to crypto to physical commodities to gold stocks. When prices are low after major selloffs, bearishness and apathy lead traders to abandon sectors. Right when they should be diligently engaged looking for opportunities to buy in relatively-low, they flee. That’s why most speculators and investors ultimately fail in the markets.
Then later when those same perpetually-cyclical sectors inevitably rebound soaring to lofty heights, traders flock back. They get caught up in the popular greed and euphoria stoked by increasing and more-bullish financial-media coverage. As their interest soars they flood into sector newsletters, then end up buying in relatively-high after the lion’s share of gains have already been won. Way late, they usually ride down selloffs.
Sector psychology follows prevailing price levels, slowly swinging like a giant pendulum between greed and fear. The reason I’m writing today’s essay is gold-stock sentiment sure seems to be nearing the halfway point at the bottom of that arc! This sector is no longer mired in fear like in late February when traders should’ve been aggressively buying. But despite their surge, gold stocks aren’t yet drenched in greed.
This chart reveals GDX’s mounting bull market over the past couple years. Gold stocks have achieved higher lows and higher highs on balance, carving an indisputable secular uptrend. From this sector’s last major bear-market low in late September 2022 to mid-July 2024, GDX has powered 79.6% higher. Yet this young bull remains super-small by sector standards, with much-larger gains coming as traders return.
Gold stocks are ultimately leveraged plays on the metal they mine, which overwhelmingly drives their profits and hence stock prices. GDX’s bull is mirroring gold’s underlying one over this same span, where the yellow metal climbed 51.9% at best. The major gold stocks have actually only amplified gold by 1.5x in this bull, still way under their usual 2x-to-3x range! Sector psychology has remained stubbornly bearish.
That resulted from a pair of crazy anomalies. First gold and especially gold stocks collapsed in mid-2022, as the Fed’s most-extreme hiking cycle in its history launched the US dollar stratospheric. That fueled excessive gold-stock bearishness taking longer than normal to work off. Second the US stock markets have been soaring in their latest AI bubble led by mega-cap tech, distracting traders from all other sectors.
But all that is changing, with gold enjoying a remarkable breakout to many new nominal records this year! Incidentally on that experience front, I predicted that in my early-January essay “Gold’s 2024 Breakout Upleg”. With gold still at $2,043, I concluded “gold’s breakout upleg into nominal record territory is set to accelerate in 2024. New records generate bullish financial-media coverage putting gold back on investors’ radars.”
Even American stock investors who have ignored gold’s entire upleg are starting to take notice as the AI stock bubble looks to be bursting. The combined gold-bullion holdings of the mighty American GLD and IAU gold ETFs grew 1.7% or 20.2 metric tons in July, their biggest monthly build since March 2022! Capital inflows into gold have grown as the flagship S&P 500 stock index pulled back 4.7% in seven trading days...
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