A Golden Shot Of Opportunity From This Mining ETF?

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Figure 2 - COMEX Gold Futures (GC.F)

Gold is moving back up in today’s pre-market trading and since miners were able to shrug off yesterday’s decline, then today’s comeback would likely trigger their upswing.

Please keep in mind that the upswing mind be relatively short-lived – perhaps lasting only one week or so. There’s a triangle-vertex-based reversal point on Monday, so it wouldn’t be surprising to see an interim top at that time, especially considering that:

  1. The triangle-vertex-based turning points have been working particularly well in the recent past – they marked the January and February tops.
  2. The corrective upswings during this medium-term decline (especially in mining stocks) often took about a week to complete – at least the easy part of the upswing took a week.

The USD Index has been rallying relentlessly – just like in 2018 – in the last couple of days, but a quick pullback would not be surprising. In fact, the USD Index is already lower in today’s pre-market trading.

Figure 3 - USD Index (DX.F)

Yesterday, the USD Index closed above its lowest daily closing price of August 2020 (92.13), but at the moment of writing these words, it’s already after a move back below it. If the USDX closes the day below it, we’ll have an invalidation of a breakout with bearish implications for the very short term.

How low could the USD Index move during this pullback? Not particularly low, as the similarity to 2018 implies a rather unbroken rally. The February 2021 high of 91.6 seems to be a quite likely target, but we might see the USDX move a bit lower as well – perhaps to one of the classic Fibonacci retracements based on the recent upswing – lowest of them (the 61.8% one) being at about 90.8.

Ultimately, it seems that the above corrections will result in the GDX ETF moving to about $34 or so.

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Figure 4 - VanEck Vectors Gold Miners ETF (GDX)

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Disclaimer: All essays, research, and information found on the Website represent the analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong ...

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