HUI:Gold Ratio

I wanted to point out the breakout in the HUI:GOLD ratio. Under normal circumstances, I’d begin entering long positions when a breakout like this occurs. But since we are in the critical period for a possible crash into an 8-year cycle low I’m reluctant to call a bottom. As illustrated in yesterday’s report, I need to see miners exceed key levels before turning bullish.

The HUI:GOLD ratio closed above the 50-day EMA and broke the downtrend, supporting a potential bottom. Breaking above the 0.174 high established in November will confirm a low in miners.

(Click on image to enlarge)

The HUI:GOLD ratio suggests that metals and miners may have bottomed. If we weren’t in the critical period for an 8-year cycle, I’d call a low and begin entering long positions.