Gold Stocks A Leisurely Uptrend

The US stock market and bullion swooned yesterday, but the GDX gold stocks ETF was up! 

Gold stocks continue to perform impressively. Rallies look impulsive and corrections feel solid.

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daily gold chart

Gold has pulled back by about 30% after staging an enormous $170/ounce rally. 

In the scenario shown on this chart, gold could trade down to the 50% retracement area and support zone at $1250-$1260.

From there, the rally would resume and gold should surge to my next $1400 target zone.

The next US jobs report is on Friday, and that report is likely to help indicate whether gold range trades or pulls back to $1260 or so before that rally to $1400 takes place.

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My alternative scenario has the current area as the correction low, and a range trade between $1275 and $1350 would occur over the next few months.

Even though gold has corrected by about $70 from the $1350 zone, some individual miners have barely corrected at all. This is another sign of a very healthy market.

Over the weekend, some readers told me they were worried that Goldman Sachs’ influential analysts may be about to lower their $1425 gold price target back down to $1050.

With thanks to the forexLive team, I’d like to put that worry to rest.

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Not only are Goldman’s analysts still positive about gold…

They are raising their target prices!

The Western gold community can relax and enjoy this price pullback because there’s nothing to fear and everything is fundamentally solid.

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There’s an important double bottom pattern in play on this FXI-NYSE Chinese stock market chart.

I’ll also note that it closed higher yesterday while the American Dow fell hard. Tariffs progress, government stimulus, and bigger weighting in international indexes should push the FXI higher.

In turn, that’s going to put Chinese citizens in a positive mood and make them eager to buy more gold.

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