I have been a long term holder of gold and view it as a currency surrogate. The miners are a different animal altogether, and while I do own some mining companies in the form of Fidelity Gold (FSAGX) in my retirement accounts, GLD is my favored vehicle. I also have SLV.
The charts, however, are showing some signs of technical weakness and this may get worse as macro factors weigh on the cost structure of gold mining companies. If oil rises, gold miniers will experience margin pressure since they use an inordinate amount of fossil fuel in production. As the stock market recovers, interest in owning gold will wane.
Gold sentiment has been bearish for a while with advertisements to buy gold becoming commonplace. This usually occurs near the top of the market.
GLD has broken down below trend as the stock indices have improved. This may be evidence of damage to the gold complex. I will continue to hold both GLD and SLV, but favor SLV currently.
ABX is a short candidate here, trading below its 20 dMA and now having retraced 23% on the Fibonacci. Set the buy-stop near overhead resistance, but not too tight.
NEM is not as clearly a short candidate, but is showing signs of weakness. If oil spikes and/or we have continued improvement in the stock indices, this could fall apart. Short only below 34.50 and use the declining trend line as the buy-stop. It can fall pretty far if it breaks down. 
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I think GLD still has some gas in the tank... we'll see
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I wonder where that NEm chart comes from
ReplyDeleteWhat do you mean? Does it look like a TK "House roof"? I think your idea of using the 50% retrace on GLD is good for a stop out. SLV getting murdered today.
ReplyDeletedid you read the Mamis letter..
ReplyDeletegold will retest 800 or 700... That was resistance and the sell signal at 900.
but... I don't track it so My talk is mostly noise. Except that there is a solid double top...
and if you want use the double top target I think that target is in the 400 range... seems a little drastic..
So much for the death of GLD... Uncle Ben fires up his helicopter!
ReplyDeleteno kidding.. we just hit about every target I've been talking about.
ReplyDeletenow remember, the dollar tends to bottom near the FOMC, and Top at the ECB
ReplyDelete$ tops at the ECB? I did not know that... when does ECB meet?
ReplyDeletemy chart on the dollar says the trough was the 4th or so...
ReplyDeleteand I look it up and the decision by the ecb was on the 5th..
Eric, I had not read the mamis letter until just now. Eery that he saw the same thing I saw in the NEM chart. More eery that gold puller out of the dive right at NEM's support. It wasn't quite finding Osama, but it certainly was a great catalyst. T.Lo or someone had said that it was very odd how everyone was being trotted out this week to "shore up" confidence in the markets: Uncle Ben on 60 Minutes and Big Barry on Leno tomorrow. Now Obama can look like a hero tomorrow. Genius.
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