Looking at the weekly chart, you can see that the Market Vectors Gold Miners fund (GDX) has broken its big downtrend. The ADX indicator on the bottom shows the bearish trend is over. The move is coming on nice volume, too, which I'm not showing on this chart because it's busy enough (maybe next time).
The next target for the GDX is in green -- a nice move, and it could come quickly.
Let's take a look at a chart of the SPDR Gold Trust (GLD) while we're at it ...
I've added an indicator called the $BPGDM (Gold Miners Bullish Percentage Index). We need the BPGDM to rise above 30 for a confirmed bullish signal. It's not always perfect -- we got a false signal in July of last year. But combine that with the double bottom in gold and miners, and the positive shift in momentum, and I'd say gold's odds of getting back into a bull market are better than average.
Now imagine me saying that in a Crocodile Dundee voice after I throw a knife into a wall. There ya go.
Interestingly, this is coming as the US dollar index bounces from the bottom of its channel, as I predicted it would in a post earlier this week.
Since gold is priced in dollars, a bounce in the dollar, as seen tracked by the UUP here, SHOULD weigh on gold prices. That's not happening, at least not yet.
And the pullback in gold miners this morning was remarkably brief. A lot of hot money wants in, methinks.
The proof will be in the pudding. But the two new precious metals positions I recommended to Gold & Resource Trader subscribers last week are already racking up nice open gains. In fact ALL the Gold & Resource Trader recommended open gold and silver miner positions are showing nice open gains. I think there's more to come. Stay tuned.
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