Here Are The Key Levels In Gold And Gold Miners
The rally in gold and gold mining stocks easily surpassed our expectations and targets. The strength has been far more than we anticipated. The gold stocks blew past their 200-day moving averages while gold blew past $1300/oz. Now it is time to take a technical look and focus on the key support and resistance targets.
The strength of the rebound pushed the miners well beyond their 200-day moving averages and to their June and October highs. GDX is consolidating just below $24 while GDXJ is consolidating just below $35. If this consolidation turns into a correction then GDX and GDXJ could find support at their 200-day moving averages which are at $22.71 and $33.37 respectively. As you can see, should GDX and GDXJ be able to exceed recent peaks then they could rally towards important resistance levels. Those are $25.50 for GDX and $38 for GDXJ.
The rally has been just as strong in gold as it surpassed resistance in the $1300-$1310/oz zone. Gold closed the week at $1322/oz. Should gold pause or correct here then the sellers could push the market down to previous resistance but now current support at $1300-$1310/oz. Trendline resistance will come into play near $1340/oz while the 2016 and 2017 peaks would provide resistance in the $1350-$1370/oz zone.
While we are at it, let us take a look at Silver which exploded past resistance in the mid $16s. Silver will face resistance first at $17.75 then at $18.50. A break above $17.75 and the red trendline is the first step for Silver. The second would be reaching $18.50, a new 52-week high. Next week Silver will face immediate resistance around $17.30 (the October and November highs) but it will have strong support in the mid to upper $16s.
The precious metals complex has made important progress in recent weeks. Markets have broken key resistance levels and have showed no signs of slipping anytime soon. Gold is holding above previous resistance at $1300-$1310/oz while not being far from multi-year resistance in the mid to upper $1300s. The gold mining stocks have reclaimed their 200-day moving averages while consolidating tightly beneath the June and October highs. If and when GDX and GDXJ break those levels then they will be only one step away from a full blown bull market. That step is breaking above the September highs.
In recent weeks our tone has shifted and as such we have accumulated a few new positions. We seek the juniors that are trading at reasonable values and have technical and fundamental catalysts to drive increased buying.
Jordan Roy-Byrne, CMT is a Chartered Market Technician and member of the Market Technicians Association. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection, as well as TheDailyGold Global, an add-on service for subscribers which covers global capital markets. He is also the author of the 2015 book, The Coming Renewal of Gold’s Secular Bull Market which is available for free. TheDailyGold.com was recently named one of the top 50 Investment Blogs by DailyReckoning and WalletHub.
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