Gold stocks are now “back to where they were” back in December 2010…

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Gold Stock ETF (GDX) is now trading at the same price it was back in December of last year and yet Junior minors ETF (GDXJ) remains almost 15% lower, during the same time frame.  If you purchased GDX just before Christmas last year, it has been pretty much dead money, despite Gold climbing over 20% in value ($400 per oz.).

The situation with GDX is going to get very interesting due to Gold facing key channel and Fibonacci resistance (see $1,900 Gold resistance) and GDX up against line (1), at the same time.  A breakout above (1) would be a positive for GDX, since it has been inside of a trading range now for almost 9 MONTHS!

Gold stocks have reflected relative weakness compared to Gold for almost a year...if long the Gold stocks, don't harvest at this time, yet do put protection in place ASAP.

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3 Comments

  1. Mr. Kimble,

    My long gold stocks have certainly not matched the current steep rise of gold bullion.

    You state “…if long the Gold stocks, don’t harvest at this time, yet do put protection in place ASAP.”

    Can you please advise what kind of protection you recommend for gold stocks?

    Thank you.

    Paul

  2. [...] maintain its current lofty levels.  As Chris Kimble notes, GDX (the large cap gold miners ETF) is flat since December 2010 while gold itself has added another 20% in gains.  It is also just nearing resistance and could [...]

  3. Paul….I would put a trailing stop on them. I don’t know your situation, yet I wouldn’t give them too much wiggle room!!!

    If Gold does decline a little bit here Paul, odds would favor GDX could get hit pretty hard since it is up against key resistance!
    Chris