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Gold Mining Stocks: Spectacular Chart, Bear Market Resistance Test Underway

Gold mining stocks had a great performance in January after they lost 43 percent since they topped last summer. InvestingHaven’s research team noted that gold is one of the 5 leading markets at an inflection point right now. Uncoincidentally, gold mining stocks are also at an inflection point. They are about to test their bear market resistance price point. This is a very important moment in time for gold investors.

As reported before gold tends to move in channels, both up (bull markets) and down (bear markets). Analyzing the price of gold should always happen in the context of falling or rising channels. Right now, gold is near a very important test: $1260. Likewise, gold mining stocks are about to test an even more important price level than gold: 26 points in the GDX ETF.

Gold and mining stocks tend to overshoot their channel, as seen in the fall of 2015 and the summer of 2016. That was really under extreme bullish or bearish sentiment. At this point in time, sentiment is not really extreme in the gold market. InvestingHaven’s research team expects either a breakout or gold mining stocks to be stopped cold, between 26 and 28 points.

A break above 28 points would be incredibly bullish, and would mark a turnaround from a bear to a bull market in gold mining stocks. However, if the 26 to 28 level will appear to be too hard to overcome, the falling trend lines will be tested in the coming months.

Gold investors pay higher than average attention on the coming 1 to 3 weeks.

  • Kenny Cheung

    He who didn’t see December 15, 2016 as a buying opportunity has already missed a $110 move in gold price as of today’s close. If following your advice that gold would hit $1000 or lower on December 27, 2016, one would have lost $11,000 per contract. All in all, by using just a simple price channel to predict gold prices one would have missed the whole picture, as it is an inadequate tool to say the least. However, using EW, MACD, Volume, and, of course, Gann’s Square of Nine and Hexagon chart, one would have seen both December 3, 2105 and December 15, 2106 as a buying opportunity instead of touting $1000 or lower for gold. Go figure!!!