Gold Bullion Versus The Miners

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GDX weekly chart

There’s an ascending triangle in play with a nice $50 price target.

It’s important the investors change with the times. What happened in the past is not what is happening now. For example, during the run to the 2011 highs, I was adamant that investors should focus on bullion more than the miners.  

Now the main focus should be on the miners.

From the early 2016 lows in the $12 area, GDX has outperformed gold bullion. While bullion is up about 60% from those lows, GDX is up about 140%.

For now, it’s a stock picker’s market. Unknown miners are soaring while a lot of the “good ‘ole boys” (the main holdings of ETFs) are struggling.

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This is another look at the GDX weekly chart.  A massive bull flag on the GDX weekly chart is in play.

Some patience is required because weekly chart patterns take time to develop and activate.

Conspiracy buffs may worry that the “Deep State” (Creep State?) doesn’t want to see gold stocks shooting higher if the US stock market falls. In this scenario, the Creep State wants the government and central banks to be the sole “economic saviors” for the people. Not gold, and certainly not mining stocks.

That’s possible, but I think failed investors are also trying to get rid of gold stocks they bought years ago, and that’s helping create the GDX flag pattern. These investors are “weak hands”, but not as weak as the investors who sold out into the 2016 area lows. 

I believe this weak hand selling is almost done, and the flag pattern supports my prediction.

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GOAU chart

I like the “KISS” principle; keep it simple, superstar! For GOAU, buying in the $15 area or on a breakout over $18 is probably the best strategy an enthusiastic investor can employ right now. 

A pullback to $15 offers value, and a breakout over $18 offers excitement! Another tool that investors can use, quite frankly, is fine wine or mineral water. Savor the time as gold stocks trade sideways. Sip a drink and enjoy the GDX bull flag development and GOAU range trade action… then cheer boisterously as the upside breakouts occur!  

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