It’s not rocket science. We are going on technicals now, with the macro-fundamentals having taken a hit on the recovery in cyclical markets that was in the bag ever since Trump first opened his big market moving mouth (like, incessantly back in March-April).
Gold and gold stocks had gotten boosted too far on the fear generated by all that tariff mayhem and related noise. With the recovery, the Silver/Gold ratio has rebounded and though grinding this week, is still in its bounce mode. That is favorable for commodities, precious metals and stocks, all things being equal. But the net result is that temporarily, gold stocks are “nothing special”. You won’t hear that from the perma-pump down the street, but you will hear it here.
That said, the big picture macro is positive for gold over most assets and that means the gold mining macro is too. That is the crux of the macro-funda, gold’s status vs. more risk-on, cyclical items. One day if a coming inflation problem drives cyclical commodities better than gold longer-term, the funda will break down. But I don’t see that day coming any time soon.
As to the daily chart technical situation. It’s pretty simple. Hold here at the SMA 50. There is visual short-term support there as well. Lose 50 and we’d look for 46 and a gap fill. But here’s the thing; GDX has not lost 50. It’s nesting nicely on the SMA 50 so far. As long as it is able to continue doing that it is a candidate to end its correction (such as it has been).
