Gold stocks failed to breakout in the spring and then broke down to multi-year lows by September.
After a vicious selloff precious metals have stabilized. Its not a surprise given the breadth and sentiment extremes we noted and had predicted earlier.
Monday’s decline in the gold stocks has moved the sector into oversold territory, another day or two of a similar decline would likely put the various breadth indicators into extremely oversold territory.
Gold was seemingly on course for its highest quarterly close since 2012 until it reversed back below quarterly resistance at $1330/oz.
The precious metals sector continues to correct and consolidate. Gold remains in a bullish consolidation.
Gold and gold stocks have remained below their 2016 peaks even in the face of a very weak US Dollar because the fundamentals are not there.
After a severe selloff, precious metals have enjoyed a bit of a respite.
The outlook for precious metals has changed quite a bit over the last month.
The decline in the US$ index in 2017 has been relentless. From a high of nearly 104 at the end of 2016, the US$ index has steadily declined to as low as 93.00.
Three months ago (April) we covered the reasons we primarily invest in junior exploration companies. We promised to follow up with some criteria we follow in attempting to pick winners. Here are five things we look for when evaluating and selecting junior exploration companies.
Gold and especially gold mining stocks rebounded on Wednesday and trended higher into the weekend.
If looking at Gold only in a vacuum, it looks good. Its uptrend since the start of the year remains intact and it has pushed above its 50 and 200-day moving averages.
As the second quarter begins, the warning signs for precious metals are mounting.
Gold and Gold stocks have rallied as expected and the consolidation in the miners in recent days looks bullish.
While we expected additional weakness in Gold and gold stocks (weeks ago) we did not quite expect the kind of selling the sector experienced in the wake of Donald Trump’s election victory.
The miners will typically lead Gold at major turning points. We say typically because the trend in the relationship is hardly exact or precise.