It was just an inkling, the little double top in the SPX/Gold ratio referred to several times in NFTRH 653.
Flipping it over, we find the Gold/SPX ratio furthering its bounce and making the hint a little stronger. Not that I’d put too much emphasis on it, but I’ve drawn in a falling wedge from which the ratio price is trying to break out. The reason I added it is that the SMA 50 is at that same point, so there’s confluence.
At the least, a continued rally in the gold stocks would be fundamentally aided by the likes of Gold/SPX turning up along with gold vs. other cyclical, inflation sensitive assets and markets.
RSI looks nice and MACD is constructive.
All along we’d asked for some fundamental signs in order to improve the view from ‘bounce only’. This is a start, as is the continuing pullback in long-term Treasury yields. There is a bout of risk ‘off’ out there and that would be fundamentally positive as well if it continues (provided risk does not go ‘off’ to such a degree as to pull the miners down with it).
Bottom Line: HUI target is and has been 305-307. But then we evaluate the macro fundamental backdrop in order to help define what comes next. This is a macro hint in the right direction. It would need follow through, obviously.
