The Gold/SPX ratio has dropped back to the 200 day moving average once again. I’ll remind you that a loss of the 200 day average and a lower low to the previous September low would put a significant ding in our bullish macro view for the gold sector. The SMA 200 is the major daily uptrend in this macro indicator. It is intact but testing gold bugs’ souls (the ones that are paying attention, at least).
At best a breakdown would not mean that the gold sector cannot rally, but the sector would not be anything special.
At worst, it could signal the end of the sector for a while. Gold, silver and HUI all met or exceeded important targets, after all.
But let’s see what the Gold/SPX ratios does before jumping to conclusions. As of now it remains in an uptrend and is testing that uptrend.