Gold-CCI & GDX

Before the hype of PDAC kicks in (and I install my ear plugs against it) here is one more gold sector chart that I find interesting, to say the least.

The spike in Gold-CCI (a big picture indicator of global economic contraction) corresponded with liquidation in the gold stocks in 2008.  The correlation has been an on again, off again grind since.

On the recent rally gold stocks climbed with the ratio and on the current correction they have declined with the ratio.  It has been in positive correlation since late 2014.

Click the chart for a bigger, clear view.

gold.cci.gdx

That would be a sector operating in line with one of its fundamental indicators.  The conclusion is that if Gold-CCI is good in its bullish signal (green arrow notes the moving average cross) and is merely declining with global relief then our biggest picture view is intact and our view that one day the gold mining sector (quality items only please!) is going to be the best play out there is intact as well.

Of course global policy makers have worked over and conditioned macro signals so aggressively since 2011 that there needs to be an * next this analysis.  But I’ll be damned if they are going to get me to abandon what makes sense.  Sooner or later the clowns will load back into their little clown cars and drive off or get car bombed by something breaking in the system.  Then we’ll get some sense making as the system returns to (new) normal.

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