NFTRH; Gold Sector Bounce and Macro Update

For those taking the ride, here is the bounce status of GDX, GDXJ, GLD and SLV using daily charts and some macro charts as well.  When managing a bounce within a bear market, it is important to remember that it is just that, a bear market and the larger trend is down.

GDX found resistance at the 14.50 area as expected.  It has formed a short-term channel and is declining in an orderly manner to the lower line.  That is what I would like to see hold to keep the bounce normal.  If it does hold, we look next to the SMA 200, currently at 16.68 and declining.  If it does not hold, the bounce would be in trouble.  RSI is nice and orderly.

gdx daily chart

GDXJ is very similar.  I don’t like that yesterday’s down volume was greater than Friday’s up volume.  But yesterday was ‘gap fill’ day and that might also have been a cleaning out of the unhealthy momo’s (lingo for momentum players).

gdxj daily chart

GLD unsurprisingly found resistance at the July low.  Given the similarity of its MACD to July (and March), the extremely bullish state of the recent gold CoT and the washout in gold sentiment, I think the bounce can resume.  For now GLD seems to be making a little bull flag after establishing resistance.  It could decline to fill the gap below 102, however.

gld daily chart

SLV is relatively weak and dropping hard to fill the ‘Draghi hype’ gap.  Considering its CoT was not nearly as bullish as gold’s and the proximity to the recent lows, this one should be watched closely because if the sector resumes bullish, having ground back down to fill these excitable gaps would be a positive for those of us who are not momo’s.  On the other hand, silver is where the momentum lives in the precious metals and these bugs are a fickle bunch.  If downside is to come, silver would probably lead it.

slv daily chart

Gold-Silver ratio, which we noted by a weekly chart was in a suspect-looking pattern but above support, is now not looking so bearish.  A bullish Gold-Silver ratio usually pressures the sector.  If it breaks upward from this Triangle, it would not be a good sign, assuming of course it results from both metals being relatively weak or declining.

gld.slv daily chart

GLD vs. SPY and hedged Europe continues to bounce.  The longer that continues the better for the gold stock sector.

gld, spy and hedj

GLD vs. Crude Oil and general Commodities continues to look very good and that is a sector-fundamental positive.

gold, uso, dbc

Sector fundamentals continue to grind higher but I continue to have reservations about the macro-fundamentals, especially as relates to the US Treasury market and its signals (manipulated or not, we have got to play it straight) that it believes the Fed is completely in control.

Bottom line though, the bounce appears normal at this time as a pullback was expected.