Constructive Precious Metals Sector Views

To the extent that we’ve been managing the sector’s bounce potentials *, here are some items that look pretty good for a post-FOMC sector run, assuming it does not pop too much into FOMC.

Gold and Silver CoT data look as though they’ve completed trends to a contrary bullish alignment and begun new ones to a contrary bearish alignment. But the sector rallies with that 2nd thing, as speculators firm up their bullishness. I don’t love that the little guy (blue lines) was as bullish as he was in April and May however, but he did get tamped down of late in line with some sector bounce potential. From CotBase

gold cot

silver cot

Silver/Gold ratio (SLV/GLD) has now claimed the SMA 200 on relative volume. This is a positive beyond the gold sector.

slv/gld

GDX/GLD has been weaker, but has been lurking below the SMA 200 for weeks now.

gdx/gld

GDXJ/GLD has been consolidating a break above the SMA 200 and holds that status today as the SMA 50 rises to meet the ratio’s calculated price.

gdxj/gld

And there you have it; some pretty decent views from the precious metals patch. The ratio indicators are in downtrends, not uptrends, which, along with not yet baked macro fundamentals is why it’s only bounce potential at this point. The pom poms can call it something else if they’d like. After all, some day that broken clock is going to get right.

* I’ve been much busier in more productive and/or strategically key ends of the market lately.

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