A visual update of the macro as it swings in favor of the gold mining sector.
First, nominal gold took out the SMA 50. Next objective would be a new high above the Feb. 2nd high of 1975.
HUI halted its slide above the targeted support area at 200-206, but the chart (per NFTRH 748) shows a ‘close enough for government work’ hold above that area. Should Huey rally now we can say that clear support was tested (barely). RSI ticked positive and MACD, while still in negative territory, has now assumed the same sneaky positive look we noted for gold in #748 (pardon the oversight, as I neglected to change this chart’s resistance at the SMA 50 from green to red, which it now displays properly).
On the the important gold ratios, gold has strongly affirmed its uptrend vs. SPX. Gold vs. stocks is what I call a “macro indicator”, having a lot to do with investor psychology.
Gold appears to be impulsively regaining its trend vs. global (ex-US) stocks.
Gold/CRB ratio has strongly retaken its intermediate uptrend and is starting to turn the SMA 200 up. Inflation trades? That was so H1, 2022. Gold vs. commodities is important in separating gold from cyclical commodities which in some cases feed directly into gold mining bottom line costs.
Like oil, for example. Gold/Oil ratio also appears to be slamming back into its intermediate uptrend and the SMA 200 is turned up nicely.
Gold/Copper is up hard over the last couple of trading days. The intermediate trend is still down, however. Take out the still uptrending SMA 200 and we’ll start to talk trend change.
Gold/GYX (industrial metals) is however, bullish and reasserting that bullishness. Could this be leading Au/Cu? Au/GYX is a counter-cyclical signal and a good signal for the gold mining industry as gold is outperforming other materials as well.
Gold/ ‘inflation expectations’ gauge RINF is starting to reassert the intermediate uptrend after getting clubbed by the recent uproar in lagging inflation data. Our favored macro lives on.
Finally, Gold/Silver ratio is playing ball too by pulling back. If gold is beating everything else except silver that is probably a best case scenario for the gold miners as silver so often leads the sector’s bullish phases.
Follow through is needed all around, and we both know how the sector can get hammered out of nowhere when we put on our tin foil hats and see FOMC on the near horizon. But all I can do is call what I see and what I see right now is a hard swing back in the favored macro direction, which is disinflationary with maybe a deflation scare out on the horizon. If the gold miners make a statement move now any market liquidation in the future that might drag them down would be a buy. As it stands now, let’s recall all those gaps GDX has above that are begging to fill.
