Gold is getting quite some attention lately. With political instability picking up again, investors and media favor the safe haven appeal of gold. But is gold really bullish or bearish right now? Moreover, what to think of gold mining stocks: buy or not?
First of all, InvestingHaven repeatedly said that April would be very important for gold and silver prices. Both gold and the dollar are close to new bullish or bearish trends.
That is primarily because of their individual chart setup, but, more so, their intermarket dynamics which is the effect that one market has on other markets. In that context, the primary trend we identified was Yields, which we considered a leading indicator for gold as well as stock markets.
Right now, we spot a concerning trend in the gold space, in particular the gold mining space. The GDXJ is underperforming against GDX. What that means, in simple terms, is that risk is fading away. GDXJ, the junior gold mining index, outperforms the larger gold miners if the precious metals complex is bullish. Right now, we see the opposite.
That trend started in March, and continued in April.
If our observation is correct that April 2017 will be a decisive month for precious metals, then the indicator on the chart (GDXJ to GDX) suggests precious metals have peaked for the year. That would confirm our forecats, see gold price 2017 forecast, silver price 2017 forecast and gold mining 2017 forecast.
The VanEck Vectors Gold Miners ETF (NYSE:GDX) rose $0.05 (+0.21%) in premarket trading Friday. Year-to-date, GDX has gained 12.72%, versus a 5.28% rise in the benchmark S&P 500 index during the same period.
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