Should You Invest In Precious Metals Or Gold Mining Stocks?

gold mine
From Tom Aspray:

Even though the month of June is not over yet, the technical action in gold, as well as some of the gold stocks, have been impressive.  So far in June the Spyder Gold Trust (GLD), which reflects the performance of gold bullion, is up 2.5%.  In contrast, the Dow Jones US Gold Mining Index ($DSUSPM) is up 8.5% with the VanEck Gold Miners (GDX) up just over 9.6%.

NYSE:GDX June 20, 2019 4:59pm

Why gold mining stocks could soon surge higher

gld stock
From Alan Farley:
Gold miners are returning to life after a long slumber and could reward gold bugs and other bulls with superior returns in coming months. Sector gains may be widespread, with participation at all capitalization levels and the potential for the strongest components to post six- and seven-year highs. Better yet, there's no rush to get on board because major mining funds are now trading at resistance and could offer more advantageous entries at lower prices. The gold futures contract is trading above $1,350 for the first time since February 2019. More importantly, it has now completed a six-year basing pattern that will set off major buying signals when the uptick lifts above the 2018 high near $1,400, or $130 on SPDR Gold Trust (GLD). (See also: Gold Completes 6-Year Basing Pattern.) However, the breakout could take time to unfold, allowing sector aficionados to place limit orders at lower levels on major funds or their favorite miners.
Chart showing the share price performance of the VanEck Vectors Gold Miners ETF (GDX)
TradingView.com
The VanEck Vectors Gold Miners ETF (GDX) came public in the mid-$30s in May 2006 and entered a narrow trading range, ahead of a 2007 breakout that reached $56.87 in March 2008. It crashed with world markets during the economic collapse, bottoming out at an all-time low in the mid-teens, ahead of a 2009 recovery wave that reached the prior high at yeas end. The fund broke out in the fourth quarter of 2010 and eased into a volatile pattern that posted an all-time high in the upper $60s in September 2011.
A 2012 breakdown signaled the start of a multi-year decline that continued into January 2016's bottom at $12.40. The fund posted exceptionally strong upside into the summer of 2016, more than doubling in price into a three-year high in the lower $30s. Price action since that time has been sandwiched between the 2016 high and low, while the pattern since 2017 has carved a long trendline of slightly lower highs.
The latest bounce has reached this resistance level for the fifth time, raising odds for a breakout at the same time as the underlying commodity. The first upside target lies at the 2016 high, offering a potential 33% profit after a breakout, but the monthly stochastic oscillator has crossed into a sell cycle, predicting that it's too early to buy the fund or popular components. As a result, it makes sense to sit on our hands and wait for lower prices.
Chart showing the share price performance of the VanEck Vectors Junior Gold Miners ETF (GDXJ)
TradingView.com
The VanEck Vectors Junior Gold Miners ETF (GDXJentered the public exchanges at $104 in November 2009 and topped out at $118.76 a month later. It cleared that resistance level in September 2010 and exploded to the upside, posting an all-time high at $179.44 in December. The fund carved a topping pattern into September 2011 and broke down, entering a severe downtrend that yielded a one-for-four reverse stock split in July 2013.
The fund bottomed out at $16.87 in January 2016 and turned sharply higher into August, topping out at a three-year high in the low $50s. Bearish price action since that time has carved a long and lazy series of marginally lower highs and lows that have held above the .618 rally retracement level, keeping the bullish 2016 buying impulse in play. However, unlike GDX, it's hard to draw a trendline of highs that define a narrow breakout level.
The monthly stochastic oscillator shows a more advanced sell cycle than the larger-cap fund and has now dropped into the lower half of the panel. This is a "no buy" zone because it predicts that prices will drop further when the indicator approaches the oversold line. Taken together with the missing trendline, it makes sense to avoid junior miners except for group leaders, at least until the fund mounts the 50-month exponential moving average (EMA) in the mid-$30s.

The Bottom Line

Gold miners have turned higher in sympathy with the gold futures contract and could hit multi-year highs in the coming months.

The VanEck Vectors Gold Miners ETF (GDX) fell $0.01 (-0.04%) in after-hours trading Friday. Year-to-date, GDX has gained 0.39%, versus a 8.83% rise in the benchmark S&P 500 index during the same period. GDX currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #8 of 34 ETFs in the Precious Metals ETFs category.
This article is brought to you courtesy of Investopedia.
NYSE:GDX June 14, 2019 5:31pm

Gold Miner ETFs soar amid political uncertainty

From Timothy Smith:
NYSE:GDX June 3, 2019 12:33pm

Why does China continue to be the largest gold consumer in the world?

china flag
From CME Group:
Gold has long enjoyed deep cultural significance in China, which holds the title for being both the world's largest gold consumer and its largest producer. Demand for the yellow metal in China looks like it will continue to rise, driven by a combination of increasing levels of wealth, global economic uncertainty and changing central bank policy.
NYSE:GDX May 17, 2019 1:18pm

Gold purchases by central banks in Q1 were the highest in 6 years

gold bars
From Rupert Rowling:

(Bloomberg) -- First-quarter gold purchases by central banks, led by Russia and China, were the highest in six years as countries diversify their assets away from the U.S. dollar.

NYSE:GDX May 2, 2019 6:06pm

Gold Mining Sector is Rising on Global Economic Fears

Gold Price
From Frank Holmes:

Bond yields are crashing in major markets all around the world as fears of a global economic slowdown have prompted investors to seek shelter in low-risk government debt. Both Germany and Japan's 10-year bond yields are back below zero, marking the first time we've seen German yields turn negative since October 2016. As I shared with you last week, the pool of negative-yielding bonds around the globe now stands at a post-2017 high of $9.32 trillion. Yields in Australia and New Zealand have also fallen to record lows, according to Bloomberg.

NYSE:GDX March 27, 2019 3:27pm

Gold Miners Are Finally Making Some Interesting Capital Investments

gold bars
From Frank Holmes:

Last week I was pleased to attend the Prospectors & Developers Association of Canada (PDAC) conference in Toronto. PDAC is one of the largest mining conferences in the world. More than 25,000 people turned out this year, many of them selling equipment services, exhibiting securities and investments, making presentations and much more.

NYSE:GDX March 15, 2019 11:45am

Gold Mining ETFs Heat Up on Merger & Acquisition News

gold bars
From Sweta Killa: The gold mining space has been heating up with three-way fight between the world's largest gold companies. This is especially true as Newmont Mining Corp NEM rejected an all-stock merger proposed by Canada's Barrick Gold GOLD and reiterated its intention to move forward with the planned smaller U.S. rival Goldcorp GG merger (see: all the Materials ETFs here).
NYSE:GDX February 27, 2019 3:58pm

Gold miner ETF sees volume spikes

gold bars
From Todd Shriber: The VanEck Vectors Gold Miners ETF GDX 1.64%, the largest gold miners exchange traded fund listed in the U.S. saw major volume spike Wednesday following a huge uptick in turnover on Tuesday.
NYSE:GDX February 21, 2019 3:30pm

Why gold stocks will rally 10% in the near-term

gold
From Jordan Roy-Byrne: Roughly one year ago and prior to that we observed that the gold stocks could be following the recovery template from what we deemed a "mega-bear market."
NYSE:GDX February 18, 2019 3:39pm

Gold Mining stocks are a hot topic, after years stuck in the doldrums

From Thomas Biesheuvel:

(Bloomberg) -- After years on the sidelines, gold producers are suddenly the mining world's hottest topic as the industry gathers in Cape Town this week.

NYSE:GDX February 4, 2019 3:49pm

Why 2019 could be Gold’s year

2019 Stocks increase
From Patti Domm:
NYSE:GDX January 30, 2019 3:07pm

Gold Miners ETF Experiences Big Inflow

From ETF Channel: Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Gold Miners ETF (Symbol: GDX).
NYSE:GDX November 23, 2018 3:57pm

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