- We should know within the next few trading days if gold intends to breakout above $2080 and rally to new all-time highs.
- I’ll be watching gold miners closely for clues. Below are my current thoughts on GDX.
-GDX- The top panel shows MFI is near-term overbought (blue arrows). A similar reading in January triggered a 1-month correction.
However, it is important to note that in robust bull markets, indicators like MFI can stay overbought for very long periods.
BULLISH: I think the rally has more upside potential as long as GDX does not close below the January $33.34 high.
NEUTRAL: Closing below $33.34 could trigger a 3 to 5-day pullback to relieve overbought conditions and let the 50-day EMA catch up.
BEARISH: A reversal lower and progressive closes below the 50-day EMA would support a more profound (possibly multi-month) correction.
Final Thoughts
This move looks pretty strong. We could be on the verge of a meaningful breakout. The next few days are important.
I would view a strong 5% up day in gold miners today or tomorrow as very bullish.
Note- US markets are closed Friday, April 7, 2023, in observance of Good Friday.