Yesterday GDX poked the target zone of 108-110. Now it is decision time.
Reviewing the factors in play, we anticipated that a bounce could very well coincide with earnings season, which was projected to be good, and is good. What we don’t know yet is if there is an “as good as it gets” (for a while) component to this.
If the pre-election macro goes a certain way, with government and Fed goosing the economy, gold stocks could under-perform, just as they out-performed in 2025. That is yet to be determined.
But what we do know is that GDX hit the upside bound of the flag yesterday and in pre-market is recoiling from it. This could simply be a pullback to fill yesterday’s gap up, or it could be the start of a new correction leg after a failed test of the highs. I make no prediction. But I do remain on watch. We may know this week whether it’s “correction still on” or “new bull leg”.
As a side note, USD is firm but still below its 50 day average and the Gold/Silver ratio is down slightly. So there is no bearish indication yet from that vantage point.
