Keep an eye on gold 22.06.12
Keep an eye on gold 22.06.12
Breakouts and new setups in a few names
Hello everyone,
I expanded the ETF leadership board. You can see that agricultural commodities (purple) are showing leadership behind oil & gas (black).
In today’s post, I’ll focus on gold – an area I haven’t discussed since early this year.
Gold has been stuck in a 2-year consolidation and has been the weakest of the commodities. Within gold equities, leadership is very thin, however, the XAU gold/silver index is still holding this big 10yr base support:
There’s also a few breakouts happening, as well as new long setups forming. Let’s look at the monthly charts for 8 different gold miners.
Breakouts
KNT is working on a big breakout this month. Meanwhile, PRU and BYN have been rallying after a breakout retest last month.
New setups
Here are 5 stocks sporting nice bases within uptrends: FNV, WDO, RUP, ARTG, MAI. Keep an eye on them for a new breakout.
Sentiment, Positioning, and Seasonality
Virtually no retail traders are interested in this space anymore. Meanwhile, smart $ positioning is at its more bullish end over the past several years.
Finally, over the past 20 years, gold has shown seasonal strength from Jul-Aug.
Source: EquityClock
Intermarket
Gold has tended to move very closely with bonds, especially real bonds.
FNV (the largest gold royalty company) has tracked TLT quite closely over the past 10 years (until recently).
We know that bond yields bottomed in the summer of ’20 and have been rising ever since. Over that time, gold has chopped sideways. But note that KRE:SPY has been diverging from bond yields all year. If bond yields follow suit, it can be a nice boost for gold.
Summary
The gold space still has weak momentum. However, a few names are breaking out. This combined with sentiment, positioning, and seasonality can propel gold higher this summer – especially if bond yields give way. Definitely keep an eye on this space.
That’s all for this week! Please click below to join the FREE e-mail list if you haven’t already.
Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.