These days gold is the last thing on pundits’ wish list. Many have started claiming that the yellow metal does not fit the modern day requirement of a safe haven asset. Talk of Bitcoin being a new 24/7 gold/safe haven is gathering pace.
Nevertheless, the metal found a bottom at $1122 in December 2016 following the Fed rate hike and has moved to $1180 levels. Fundamental experts continue to cheer gold bears as ‘Trumpflation’ is widely expected to boost growth as it did during the ‘Reagan years’. Meanwhile, technicians say the rally could go to $1200 before a broader downturn resumes.
However, major US gold miners are breaking higher… possible, suggesting the yellow metal could revisit $1240-1250 area over the next few months.
Market Vectors Gold Miners ETF (GDX)
The daily chart shows a bullish break of the falling channel
The descending trend line coming from the 2011 high was breached in early 2016. A broader look at the weekly chart suggests the prices could be forming an inverse head and shoulder pattern (bullish reversal pattern).
The bullish break from the falling channel on the daily adds credence to the possibility of the prices rising to neckline hurdle seen around $32.50 levels over the next few months.
Barrick Gold (ABX)
The miner has witnessed a bullish break from the falling channel as well. The pattern on the weekly chart is more or less similar to the bullish pattern seen on the GDX weekly chart.
A minor corrective move to $16 could be followed by a rise to $18.90-19.00 levels.
Daily chart – again shows a bullish break of the falling channel
The weekly 50-MA is rising, while the weekly 200-MA is bottoming out. We have also had a bullish 50-MA and 200-MA crossover.
The stock could rise to $40-43 levels over the next few months.
Goldcorp – Awaits bullish break
Kinross Gold – At make or break level
Repeated failure to take out the channel resistance could end up sending prices lower to the recent low of $2.96.
To conclude –
Gold bulls could make a bullish bet via the above discussed gold miners. A portfolio may include market vectors gold ETF and Barrick Gold, while the risk could be hedged with a bearish trade on Kinross and Goldcorp… given that both stocks are yet to see a bullish break on the charts.