This Chart Says Gold Miners Will Rally for the Next 3 to 4 Months

Gold dustTechnical analyst Gary Savage presents a chart of the Market Vectors Gold Miners ETF (NYSE:GDX) that suggests the recent correction in metals and miners is over.

GDX has now completed a weekly swing, barring a complete reversal the rest of the week. This deep into an intermediate decline, a swing stacks the odds heavily in favor of the correction being over. The metals should now rally for the next 3-4 months.

GDX

Gold miners had seen a steep correction in recent months following a huge rally in the first six months of 2016, but analysts have become increasingly bullish on the mining sector (and precious metals in general) as of late. Yesterday, Larry McDonald called the gold miners a “screaming buy,” and Jordan Roy-Byrne recently suggested the correction was nearing an end as well.

Meanwhile, the yellow metal itself remains stuck around the battleground $1,250 price area. What gold does over the next few weeks just might determine its direction over the next several months.

The largest gold-focused ETF, the GLD, has led all U.S.-listed exchange traded funds this year in terms of net inflows, so its clear investor appetite for the yellow metal is there. It’s beginning to look like a question of when, not if, gold prices — and by proxy, the miners — will rebound and begin their next leg up.

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