After a prolonged decline, gold miners continue to show signs of strength.
The charts below support an intermediate breakout and a renewed uptrend in precious metals.
If gold bottomed, as defined, it should stairstep its way back towards the $2000 level over the coming weeks/months.
If you’re new to precious metals, gold investors need to have nerves of steel. Corrections in this space are trying events due to duration and severity. The last 8-months were no exception. If you are still standing – congratulations!
For a bullish recognition day, I like to see GDX finish 5% or higher. Today, it finished at 4.14%. A good day, but not enough to meet my criteria. Gold may have to break above $1780 to trigger additional buying interest.
New daily cases continue to surge in India. Today’s numbers are coming in at 216,850. At this rate, daily cases could surpass 300,000 before May.
Our Gold Cycle Indicator finished at eight (8) after remaining at zero for several weeks. We used that time as an opportunity to load up on miners for the Educational Portfolio. I believe it is well-positioned for the next advance.
-GOLD- Gold closed above the $1760 level, supporting a breakout from the double bottom. I’d like to see additional follow-through above $1780 and then $1800 in the coming days.
-SILVER- Silver appears to be breaking free (finally) from the handle portion of the continuation pattern. I expect upside follow-through and a breakout above $30.00 in May.
-PLATINUM- Platinum found support near the lower boundary. Prices need to breakout above $1250 in the coming days to support an immediate move to fresh highs.
-GDX- I believe gold miners formed a bottom in March. If correct, prices should stairstep their way back towards the $45.00 level and potentially to new highs by August.
-GDXJ- Juniors closed above the March high supporting a bullish breakout from the W-Bottom.
-NEM- We are getting a robust move in Newmont above the March high and intermediate trendline. By all measures, it looks like a breakout. Prices could reach new all-time highs as soon as May.
-FNV- Franco-Nevada was the first to break above the March high. Prices are above the 200-day MA after forming the small bull flag. The trend should continue back towards the $160 level and new all-time highs.
-KL- Kirkland Lake Gold is my favorite gold producer and could have significant free cash flow in 2021. They have zero debt and $850 million in cash. Prices formed a picture perfect W-bottom in March and are breaking out as I write. This is my highest conviction holding; I am significantly overweight.
Ideally, we will get upside follow-through tomorrow or early next week. I’d like to see miners continue to lead.
Have a great night.